US homewares giant Williams-Sonoma to set up shop in Sydney

Lisa MacNamara
April 24, 2013
The Australian

US homewares giant Williams-Sonoma believes it can defy the local retail downturn, declaring Australia a long-term proposition as it unveils the first of its bricks and mortar stores in Sydney next week — the first company-owned outlets outside North America.

The opening of the new multi-storey presence on prime real estate at Bondi Junction, in Sydney’s east, will see the retailer join the rush of global brands such as Top Shop and Zara and soon-to- arrive fashion labels H&M and Japan’s Uniqlo, which have leveraged off online customer bases to establish physical stores.

It will also provide new competition in the homewares, cooking and furniture space for the likes of Harvey Norman, Domayne and department stores David Jones and Myer. Senior vice-president of Williams-Sonoma’s global development Craig Nomura says that despite the recent pessimism about local consumer appetite from its new rivals, Australia was the most attractive choice for expansion.

“I’ve looked at the numbers in terms of performance of retailers over the past two or three years and relatively speaking Australia’s performance is better than most other countries around the world,” Mr Nomura said from San Francisco. “And this is a long-term strategy for us. Secondly, the familiarity with our products and being an English-speaking country certainly made it palatable to open a store in Australia.”

This familiarity with its furnishings and home decor stores, particularly at Pottery Barn, has been reinforced in part through clever product placements on popular US TV shows, which have been heavily consumed over the years by Australians — the evidence of which shows up in Williams-Sonoma’s online shopping queues.

“Outside of the US, Australia is our largest e-commerce market, and for a country that only has 23 million people, that’s quite impressive,” Mr Nomura said.

“Awareness of our brand is quite high in Australia and it’s due to the fact that there have been some television shows — like Friends — and what we found was that people are aware of the Pottery Barn name, but I don’t know if they know what we do.”

Aside from Pottery Barn the group also has baby and toddler offering, Pottery Barn Kids. Joining them is eclectic homewares store West Elm and the Williams-Sonoma branded outlet that sells high-end kitchenware.

Further expansion is planned in Australia with another West Elm set to open in Melbourne’s South Yarra later this year as the company looks to replicate its success in the US, where it has more than 570 stores. Last year, net revenues climbed 9 per cent higher, breaking through $US4 billion for the first time in its 50-plus year history.

Williams-Sonoma’s new general manager in Australia, Pennie Rende, has been with the retailer for a decade in the US before arriving at her new job two months ago.

She says its unique services, such as free design services and food preparation techniques and tastings, has been the driver of its profitability in the US — and will be the key in differentiating the brand in Australia, where she says demand for good service is fierce.

“The thing that will be unique to the Australian market is the opportunity for them to experience what we offer,” Ms Rende said.
“People are really drawn to us because of our level of service and the offerings that we provide. Each brand has its uniqueness — Pottery Barn, Pottery Barn Kids and West Elm all offer free home design and in-store so you can have our experienced designers design your spaces and it’s completely complimentary. That’s very unique in the market place.”

They will use heavy marketing to get the message out.

And like many US retailers that are old hands at online tactics, Williams-Sonoma has a multi-channel approach. Its 2012 financial results revealed that 46 per cent of its business came from its direct-to-customer channels of e-commerce and catalogues.

Applying the same strategies in Australia, including hiring a social media strategist, the group will target consumers particularly through a local internet presence.

“We know that as a country Australia has a high percentage of its citizens using the internet to not only shop but to browse. If you compare the internet usage in Australia compared to other countries, it’s quite high today,” said Mr Nomura. “In three years time they’ve forecast that 85 per cent of the population is going to be shopping on the internet in Australia.”

Although overseas expansion is on the firm’s radar — to sit alongside Australia as well as a franchise agreement in the Middle East — Williams-Sonoma says it is focused for now on local growth throughout its new home.

“We’re trying to find the right markets all around Australia so we can open more stores,” Ms Rende said