Pottery Barn 2012 Annual Report Download - page 8

In the Williams-Sonoma brand, we are executing an exciting vision of innovation that will allow us to become
increasingly less reliant on branded goods. We have a robust schedule of new product introductions, including
the expansion of our Williams-Sonoma branded cookware and tools. We are committed to profitable growth in
Williams-Sonoma and will serve our customers through product innovation, marketing and channel excellence.
In Pottery Barn Kids, revenues increased as our customers came to us to create rooms for their children. We
continue to refine our marketing strategy to appeal to different life stages, lifestyles and genders. We are also
committed to further developing the relationships our customers have with our brand and to enriching the design
expertise of our associates.
West Elm is our largest growth vehicle, and now represents almost 11% of our total revenue. We have
accelerated sales, customer acquisition, and customer engagement through integrated multi-channel marketing,
with particular success in social media and partnerships. Our strategy is to profitably grow the brand by engaging
with a broader base of customers while maintaining a compelling value proposition.
The PBteen brand is the only home-furnishings brand in the marketplace dedicated solely to teens. We will
continue to grow the brand by broadening its aesthetic to engage a wider range of teens and by creating new and
exciting non-traditional retail experiences.
With this backdrop of a successful entrepreneurial track record, we incubated and launched new businesses this
year, including Mark and Graham, West Elm Market and Agrarian. Mark and Graham specializes in high-quality
personalized products and gifts. West Elm Market, a brand extension of West Elm, expands the brand to new
categories in new settings. Agrarian, a new category extension of the Williams-Sonoma brand, celebrates
homemade and homegrown. 2012 also marked Rejuvenation’s first full year as part of our portfolio of brands.
We plan to expand on each of these businesses in 2013.
As consumers increasingly go online to not only research, but to find and buy what they are looking for, we
believe that we are especially well-positioned. With decades of catalog experience, we have a deep understanding
of how to engage and sell directly. We are not sellers of commodity goods, but of carefully edited assortments of
quality products that, when shown in the proper setting, project a lifestyle our customers desire.
Global expansion represents one of our most important growth prospects over the next 10 years. As we shop the
world, we continue to see a significant opportunity. Our global vision is to serve our customers with the same
high-service model that we do in the United States, with a multi-channel strategy focused on e-commerce. In
2013, we will enter into the Australian market, with company-owned retail stores and e-commerce sites. Our first
four stores will open in May and will set the stage for further expansion. Our franchise business in the Middle
East continues to grow, and there are now 23 stores across our brands.
We believe that our supply chain is a differentiating competitive advantage. It is designed specifically for our
merchandise, which is frequently both heavy and fragile. When we deliver quickly and safely to our customers,
we not only improve service, but reduce costs. In 2012, we implemented elements of our network re-design, and
we in-sourced important functions within our product sourcing organization. We also continued to improve our
merchandise returns rate, a key metric in measuring customer satisfaction.
Our technology investments support our initiatives and allow us to elevate our service levels. We continue to
scale our information technology capabilities, as we know they are critical to our growth. We also know that our
customers shop all of our channels, and we are further connecting the in-store and e-commerce experience.
A year ago, we published our first Corporate Responsibility Report, sharing our commitment to sustainable
business practices. We view this commitment as more than the right thing to do, but as critical to our ability to
serve our customers, engage our associates and improve our business performance. This year we are publishing
our first Corporate Responsibility Scorecard, another important step as we build the foundation for future
progress.