Pottery Barn 2010 Annual Report Download - page 8

Operationally in 2010, we made significant improvements in our supply chain, information technology, and retail
operations. In supply chain, we continued to see ongoing customer service and cost reduction benefits from our
distribution, transportation, packaging, and quality returns initiatives. These initiatives included: implementing
the first phase of our multi-year east coast distribution center consolidation; optimizing our inbound and
outbound packaging; improving efficiency in our personalization operations; and consolidating shipments of
customers’ furniture and non-furniture orders into one delivery. Another significant supply chain initiative was
Asian sourcing , where we expanded our “in-country” operations. This initiative has allowed us to establish
factory specific expertise, improve vendor performance, and reduce returns, replacements and damages. We are
gaining similar efficiencies from the expansion of our North Carolina upholstered furniture operation, which is
now a major supplier of our upholstered furniture.
In information technology, we made significant progress in e-commerce, particularly in the areas of search,
customer engagement, mobile and social media. All of these investments drove increased traffic, higher
conversion, and a superior on-site experience for our customers. We also launched new “e-gift card”
functionality in all brands and a new “member-based shipping” program in the Williams-Sonoma brand. In
direct-marketing, we implemented new functionality that allowed us to make significant advancements in the
relevance of e-marketing programs, which has driven the effectiveness of our targeted promotion to a new level.
In real estate , for the second consecutive year, we successfully reduced our retail occupancy costs and
opportunistically closed an additional 24 stores or 2% of our retail leased square footage.
In 2010, we also spent a great deal of time building our vision for the future and we are poised to execute against
it in 2011 and beyond. Spearheading these efforts is one of the strongest leadership teams in retail. Each of our
leaders has a vision for their area and they drive for excellence throughout their organization. But, while each
leader is amazingly talented as an individual, their ability to work so well as a team allows us to move faster and
achieve greater results. Together, we see the opportunity to drive profitable growth in each of our brands, through
international expansion and through new business development.
Each of our core brands has a strategy to drive growth through improved product offerings, a superior on-line
shopping experience, and high quality service.
The mission of our Williams-Sonoma brand is to be the leader in cooking and entertaining by delivering great
product, world class service and engaging content. Our mantra is “to bring people together around food.” In
2011, we will further the brand’s authority by introducing new, exclusive, innovative products and expanding the
brand’s reach through collaborations with the cooking community. We have also now integrated Williams-
Sonoma Home into the core Williams-Sonoma website to better serve our wedding registrants and allow a
simpler shopping experience.
For Pottery Barn, our mission is to be the premier specialty retailer of home furnishings in the world by
delivering great product, great value and great customer service. Our mantra is “making houses homes.” We see
the opportunity to expand our market share in North America and lead the industry in the decorating and
entertaining sector. To achieve this, we will expand our casual, authentic, artisanal and exclusive product lines in
existing categories as well as test new ones. And, each channel will be maximized to provide solutions to our
customers’ decorating and entertaining needs. In addition, our supply chain improvements will drive value for
our customers while increasing quality and service.
Pottery Barn Kids is the dominant, upscale specialty retailer of kids and baby home furnishings. We will
continue to look for and see new ways to furnish children’s rooms and play spaces in a casual, tasteful and
appealing way. We also see opportunities to deepen our relationships with our customers in all channels through
customized shopping experiences.
We are also confident in our ability to grow our emerging brands West elm and PBteen. West Elm has been
repositioned to serve a wider range of customers with a distinct design point of view at a great value. Customer
response to this new strategy has been very positive, and we are underway in growing the catalog/Internet
business and improving profitability, as well as opening new stores while driving comparable store growth.