Pottery Barn 2004 Annual Report Download - page 10

PART I
ITEM 1. BUSINESS
OVERVIEW
We are a specialty retailer of products for the home. The retail segment of our business sells our products through
our five retail store concepts (Williams-Sonoma, Pottery Barn, Pottery Barn Kids, Hold Everything and West
Elm). The direct-to-customer segment of our business sells similar products through our eight direct-mail
catalogs (Williams-Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Bed + Bath, PBteen, Hold
Everything, West Elm and Williams-Sonoma Home) and six e-commerce websites (williams-sonoma.com,
potterybarn.com, potterybarnkids.com, pbteen.com, westelm.com and holdeverything.com). Based on net
revenues in fiscal 2004, retail net revenues accounted for 57.7% of our business and direct-to-customer net
revenues accounted for 42.3% of our business. Based on their contribution to our net revenues in fiscal 2004, the
core brands in both retail and direct-to-customer are: Pottery Barn, which sells contemporary tableware and home
furnishings; Williams-Sonoma, which sells cookware essentials; and Pottery Barn Kids, which sells stylish
children’s furnishings.
We were founded in 1956 by Charles E. Williams, currently a Director Emeritus, with the opening of our first
store in Sonoma, California. Today, the Williams-Sonoma stores offer a wide selection of culinary and serving
equipment, including cookware, cookbooks, cutlery, informal dinnerware, glassware, table linens, specialty foods
and cooking ingredients. Our direct-to-customer business began in 1972 when we introduced our flagship
catalog, “A Catalog for Cooks,” which marketed the Williams-Sonoma brand.
In 1983, we internally developed the Hold Everything catalog to offer innovative solutions for household storage
needs by providing efficient organization solutions for every room in the house. The first Hold Everything store
opened in 1985.
In 1986, we acquired Pottery Barn, a retailer and direct-to-customer merchandiser featuring a large assortment of
items in casual home furnishings, flatware and table accessories that we design internally and source from around
the world, to create a dynamic look in the home.
In 1989, we developed Chambers, a mail order merchandiser of high quality linens, towels, robes, soaps and
accessories for the bed and bath.
In 1999, we launched both our Williams-Sonoma wedding and gift registry e-commerce website and our
Williams-Sonoma e-commerce website. In addition, we launched the Pottery Barn Kids catalog, which offers
stylish children’s furnishings.
In 2000, we opened our first Pottery Barn Kids stores across the U.S. In addition, we introduced our Pottery Barn
e-commerce website and created Pottery Barn Bed + Bath, a catalog dedicated to bed and bath products.
In 2001, we launched our Pottery Barn Kids e-commerce website, Pottery Barn gift and bridal registry, and
Pottery Barn Kids gift registry. Additionally, in 2001, we opened five new retail stores (two Williams-Sonoma,
two Pottery Barn and one Pottery Barn Kids) in Toronto, Canada, our first stores operated by us outside of the
U.S.
In 2002, we launched our West Elm catalog. The brand targets young, design conscious consumers looking to
furnish and accessorize their apartments, lofts or first homes with quality products at accessible price points.
West Elm product categories include furniture, decorative accessories, tabletop items and an extensive textile
collection.
In 2003, we launched our West Elm e-commerce website, opened our first West Elm retail store and launched
our newest extension of the Pottery Barn brand, PBteen, with the introduction of the PBteen catalog. PBteen
offers exclusive collections of home furnishings and decorative accessories that are specifically designed to
reflect the personalities of the teenage market. In late 2003, we launched our PBteen e-commerce website.
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Form 10-K