The housing market's collapse already crushed demand for $849 leather ottomans from Pottery Barn and $900 cookware sets from Williams-Sonoma.
The housing market’s collapse already crushed demand for $849 leather ottomans from Pottery Barn and $900 cookware sets from Williams-Sonoma.
Plunging consumer spending amid the recession is only worsening the outlook for Williams-Sonoma (WSM), owner of both chains.
The company lost $11 million in the third quarter on a 16 percent drop in sales. For the current quarter, which includes the crucial holiday season, it forecasts sales could drop 32 percent from the previous year.
In the face of weakening demand, Williams-Sonoma has cut expenses and inventory. Consumers “are (eventually) going to invest in (their homes), and when they do, we will be there to capitalize on it,” CEO Howard Lester said.
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KeyBanc Capital Markets analyst Bradley Thomas says Williams-Sonoma has a solid balance sheet, but he won’t warm to the stock until consumer spending picks up. He rates it “underweight.”