New York City Williams-Sonoma will continue to close stores in large, multi-store markets, according to a report on Thursday by the Wall Street Journal.
CFO Sharon McCollam told the Journal that it will shutter the stores as part of its quest to return its brick-and-mortar operations to past levels of profitability.
"Our strategy for store closings is to optimize our cost per square foot," she said during a conference hosted by Bank of America/Merrill Lynch. "The goal is not closing stores per se."
Over the next three years, 25% of the leases on the stores in the retailer’s stable of brands, including Pottery Barn and the Williams-Sonoma namesake banner, will be coming to an end. Williams-Sonoma sees that as an opportunity to negotiate more favorable lease costs or terms or to relocate or close stores entirely. That should help it return to historical levels of profitability for its retail stores, McCollam said.
McCollam did not say how many stores the company is targeting for closing, saying Williams-Sonoma will update its targets each quarter as negotiations on leases progress.
About 30% of the retailer’s stores are located in densely populated markets, such as New York; Atlanta; California; and Denver, and many cities have multiple stores.
McCollam also said that Williams-Sonoma no longer considers its high-end chain, Williams-Sonoma Home, to be a growth vehicle "in this new reset economy." While the company continues to assess the marketing position of the brand, she said, "At this time, we do not believe that growing the luxury business is strategic for us."
West Elm, instead, "will be the growth vehicle for us," she said.
The chain still has 11 Williams-Sonoma Home stores "to contend with," McCollam said, adding that the company will talk more about those outlets and their future this year.