E-COMM

There’s No Place Like the Internet

Elaborate WFH setups and the pandemic sourdough bread craze helped Williams-Sonoma bigly in 2020. Now, the Pottery Barn and West Elm owner plans to shave its physical footprint in favor of its more profitable e-comm biz. 

Digital first: Online accounts for 70+% of Williams-Sonoma’s revenue, but the company is no newbie to the e-comm game. In 2019, e-comm made up 55% of the brand’s sales, and the pandemic put its online strategy into hyperdrive. 

• By next year, the company aims to expand its manufacturing and fulfillment capacity 20% to 30% with two new distribution centers.
• Williams-Sonoma’s $2.29 billion Q4 revenue surpassed a $2.18 billion projection. 

To reduce brick and mortar costs, William-Sonoma plans to renegotiate some of its leases and allow about 25% of them to expire. But the retailer is likely thinking more strategically about where it wants a physical presence—not completely pivoting away, Neil Saunders, managing director at GlobalData Retail, told Retail Brew. 

• In June, the company will open a Pottery Barn and relocate a Williams-Sonoma store in Plano, Texas. 
• This week, Williams-Sonoma opened its first UAE location. 

“They are closing stores but they’re actually opening new ones in a better location,” Saunders said. “There’s a logic to it.” 

Home is where the money is

The homeware industry benefited from consumers’ pandemic purchasing habits. Take textiles, housewares, home environment, kitchen electronics, and personal care: Over the last year, those five segments grew by $14 billion—or 24%—to reach $72 billion, according to Joe Derochowski, home industry advisor at the NPD Group. 

• Online small appliance sales now represent 50+% of total sales, and housewares and textiles reached 40+%. 

A raised bar: In the short term, for both e-comm and brick and mortar, it might be difficult for the homeware segment to match its recent growth, Derochowski told Retail Brew. But he believes the persistence of WFH and a demographic shift from cities to suburbs could keep sales high over the next decade. 

Zoom out: Although Williams-Sonoma is downsizing, retail openings are outpacing closures in 2021. Since January, 3,199 store openings have been announced compared with 2,548 closures, per Coresight Research.  

DTC

Making Room for Seconds

When we finally reswap our bathrobes for blazers, they may not have new tags. DTC workwear (and jardigan) brand M.M.LaFleur opened Second Act, a peer-to-peer resale shop, last week. 

• M.M.LaFleur shoppers can now resell their cashmere for store credit or cash.
• Resale tech platform Archive powers the back-end logistics, including an integration of the brand’s product catalog for listing images.

External validation: M.M.LaFleur founder and CEO Sarah LaFleur told Retail Brew that brand engagement on ThredUP hit an all-time high in January. Poshmark listings for its apparel are up 35%. 

Internal benefits: LaFleur told us taking resale in-house will help her brand 1) build loyalty with its top shoppers and 2) own its products’ full lifecycle.

• Early results: Of 1,088 items listed on Second Act in its first week, 296 sold. Every seller chose a store credit over straight cash.

Looking ahead…as secondhand becomes more shoppers’ first choice, LaFleur said she expects more brands will open in-house resale. But she did point out one big exception. 

“The world of fast fashion does not create garments that are meant to be worn over time, from either a quality or aesthetic standpoint, so I think there’s a barrier to entry there.”

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GROCERY

H-E-B's Mask About-Face

When Texas shared plans to end its statewide mask mandate on March 10, businesses were left to adjust requirements as they saw fit. Grocery chain H-E-B first said it would only recommend masks for shoppers at its 400+ stores, but would continue requiring them for employees. 

That didn’t last. After pressure from employees, H-E-B changed its messaging. It would keep mask requirement signage in-stores and offer free coverings to maskless shoppers.  

• “The ending of mask ordinances puts real pressure on retailers to enforce an emotional policy for many and we will not ask our Partners to put themselves in harm’s way,” the grocer said in a statement to the WSJ.
• Effects of the new phrasing: Employees told the WSJ they’re noticing more unmasked customers, and some shoppers said they’re avoiding the chain. 

Mixed government guidance and political polarization have made mask mandates difficult for retailers to enforce. Retailers have to strike a balance between keeping employees and customers safe and de-escalating potential conflicts—not skills you learn in Merchandising 101. 

Another approach: CVS, Starbucks, Target, and Walgreens have held steady on mask requirements despite state policy shifts.

WHAT ELSE IS BREWING

• Facebook Shops have 1+ million storefronts and 250 million monthly users.
• Nike missed Q3 earnings expectations due to supply chain delays. 
• Dollar General will open 1,050 new stores this year.   
• Les Wexner, founder of L Brands, is stepping down from the board.
• Swatch fears a 2021 sales slowdown without European tourism.

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SWAPPING SKUS

An embattled American institution, Sears embodies the downfall of the department store. Today’s reads demonstrate just how far from grace the chain has fallen—and how a recent closure is affecting a local community. 

• Once upon a time, you could buy a home from the Sears, Roebuck and Co. mail-order catalog. There are roughly 70,000 such homes still out there. (Popular Mechanics) 
• A nearly 100-year-old Sears is shuttering in Los Angeles. Sears’s parent company is now weighing what to do with the historic building that was a community fixture. (AirTalk)

FRIEND OR FAUX?

When you figure out which of today’s stories is the faux, you gotta admit it’s completely plausible. Can you spot the fake story below?

1. 7-Eleven Sweden has released a limited edition pajama set. 
2. Watch out, Cacti: White Claw has launched iced tea flavors. 
3. Kanye West is reportedly a multibillionaire. Turns out a sliver of his fortune is tied to his antique milk glass Easter egg collection. 
4. A CPG company has unleashed a Friends-themed pint of ice cream. 

Keep reading for the answer.

ICYMI

Catch up on the Retail Brew stories you may have missed.

• After Paper Source’s Bankruptcy, Paper Goods Sellers Rethink Retail
• Dick’s Takes on Lululemon with Men’s Athleisure Brand
• Travis Scott’s Hard Seltzer Is Here

FRIEND OR FAUX? ANSWER

No, Ye—to my knowledge—does not have an antique milk glass Easter egg collection. At least not one that’s worth billions.