Williams-Sonoma Inc. (WSM) is a well-known high-end kitchenware and modern furniture brand in the United States. It was originally a small hardware store in Sonoma, California. The company’s founder, Chuck Williams, first moved to Sonoma in 1947, where he started working as a contractor and met a group of friends who shared his passion for cooking. A trip to Europe in 1953 was a catalyst for turning his passion into a career. During his travels, Williams came into contact with classic French cooking equipment, which was different from what he had seen in the United States. A year later, he bought a hardware store in downtown Sonoma and quickly transformed it into a store specializing in French cooking utensils. Thus, Williams Sonoma was born. Since then, the company has expanded to sell a variety of high-end household products.
Benefiting from the changes in catering and food culture in the 1960s and 1970s, Williams-Sonoma’s scale has continued to expand. The company caught the attention of entrepreneur Howard Lester, who bought the company with a friend in 1976 and assumed the position of chief executive officer (CEO). In 1982, Williams-Sonoma raised funds through an initial public offering (IPO) to accelerate expansion.Today, the company has more than 600 stores worldwide with a market value of 6.4 billion U.S. dollars.In fiscal year 2019 (FY), Williams-Sonoma reported net income of US$356.1 million and net income of US$5.9 billion.
Today, Williams-Sonoma sells furniture and decorative accessories for every room in the home. It also launched two distinct brands: West Elm, which provides modern furniture and decoration; and Mark and Graham, an online platform for personalized gift purchases.
Williams-Sonoma has supplemented its internal growth through acquisitions, although not all acquisitions have been successful. For example, in 1978, it acquired Gardener’s Eden, a catalog company that sells plants, tools, and accessories, and is involved in retail gardening. Williams-Sonoma sold it in 1999.But it turns out that other acquisitions have been much more successful in expanding Williams-Sonoma’s sales, including those that use augmented reality technology to provide customers with a new retail buying experience.
We will learn more about three of these acquisitions in more detail below. The company provided sales details for some transactions, but not all of them.
Pottery Barn Inc.
- Business type: Omni-channel home furnishing retailer
- Purchase price: not available
- Date of Acquisition: September 1, 1986
- Annual net income (fiscal year 2019): $2.2 billion
Founded in 1949, Pottery Barn is a household goods retailer focused on providing products marked by superior comfort, quality, style and value. Williams-Sonoma acquired the company from Gap Inc. (GPS) in 1986. At the time, Pottery Barn had about 21 stores, mainly in Manhattan, where the range of products sold was limited.Since then, Williams-Sonoma has transformed it into a leading home furnishing retailer, selling merchandise in stores and online.Pottery Barn’s products include furniture, bedding, bathroom accessories, carpets, lighting and curtains.
Based on the Pottery Barn brand, Williams-Sonoma launched Pottery Barn Kids in 1999 and then Pottery Barn Teen in 2003. The former focuses on the furniture and decoration of nurseries, bedrooms and play spaces, while the latter provides furniture, bedding, lighting, and more for teenagers’ bedrooms, university dormitories, study spaces and lounges.
Pottery Barn and the parent company Williams-Sonoma brand are built on a reputation for selling high-quality products. But this year, the US Federal Trade Commission (FTC) imposed a fine of US$1 million on Williams-Sonoma for false “Made in the United States” statements on certain products, damaging this image. This includes upholstered furniture under the Pottery Barn Teen and Pottery Barn Kids brands, as well as products under the Goldtouch Bakeware and Rejuvenation brands.
- Business type: lighting and home improvement store
- Purchase price: undisclosed
- Acquisition Date: November 4, 2011
Rejuvenation was founded in 1977 by two friends, Jim Kelly and Barbara Kerr, who borrowed $2,500 to open a hardware and home parts store. By 2004, the company’s annual revenue was approximately US$25 million.The company was acquired by Williams-Sonoma in 2011. Rejuvenation’s manufacturing and distribution facility is located in Portland, Oregon, and specializes in custom lighting fixtures. The company also sells other hardware, furniture and home decorations.Rejuvenation’s high-quality professional products complement the Williams-Sonoma brand and strengthen its household product line.
- Business type: 3-D imaging and augmented reality
- Purchase price: US$112 million
- Acquisition date: November 16, 2017 (announced)
Outward is an enterprise technology startup founded in 2012 in San Jose, California. The company provides 3-D imaging and augmented reality technology, specifically for digital applications in the household goods and decorative accessories industry. Applications that use augmented reality add virtual images to the viewer’s field of vision, instead of virtual reality, which completely immerses the viewer in a virtual world that is cut off from the real physical world.
Williams-Sonoma acquired Outward in 2017 on an all-cash basis. Outward’s technology provides Williams-Sonoma customers with a highly interactive shopping experience, allowing them to preview in 3D what their home will look like with new furniture.
Williams-Sonoma Diversity and Inclusive Transparency
As part of our efforts to raise awareness of the importance of company diversity, we emphasized the transparency of Williams-Sonoma’s commitment to diversity, inclusion, and social responsibility. The figure below illustrates how Williams-Sonoma reports on the diversity of its management and workforce. This indicates whether Williams-Sonoma has disclosed data on the diversity of its board of directors, top management, general management and employees in various indicators. We have used ✔ for transparency.
|Williams-Sonoma Diversity and Inclusion Report|
|Race||gender||ability||Veteran status||Sexual orientation|
|Board of Directors||✔|