W E
S E
T 2010 L M
Annual Report
Table of Contents
OV E R V I EW
4/5
6/7
8/9
Mission Statement
Letter to Shareholders
Financial Spread
10/11 Company History
12/13
14/15
Future Plans
Financial Spread
Mission Statement
F OC U S
“we drove the organization to a new level of performance in virtually every aspect of our business.�
Fiscal 2009 was an exciting and rewarding year for Williams-Sonoma, Inc. While it began in the midst of the deepest recession in recent memory, our ability to rapidly change, respond, and innovate allowed us to build and prosper, despite a challenging economic backdrop. By focusing on the customer, their needs, and the aspects of the business we could control, we drove the organization to a new level of performance in virtually every aspect of our business. As a result, we were able to capture market share; optimize inventory levels; reduce selling, general, and administrative expenses to a historical low percentage of sales; and generate more cash in one year than ever before. Since all of these initiatives were rolled out progressively throughout the year, we ended the year stronger than we started – as demonstrated by our fourth quarter performance. In short, fiscal 2009 was a year in which Williams-Sonoma, Inc. committed to – and delivered – greatly improved results in a very difficult environment. While we are pleased with these results, we recognize that we must continue to drive sales and improve profitability to maintain our position among the nation’s highest performing retailers. We must further strengthen gross margins and aggressively grow sales. We also must continue to expand the reach of our brands both domestically and internationally. To this end, we will leverage our competitive advantages as a multi- channel retailer – including our significant position in e-commerce – by focusing on product innovation, streamlined execution, and the rationalization of our real estate portfolio as we work to reestablish historical levels of profitability in the retail segment of our business.
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Letter to Shareholders
P R O U D
“It has been, and will continue to be, a remarkable journey.�
It has been my sincere privilege and honor to lead Williams-Sonoma, Inc. for the past 31 years. From the first time I met Chuck Williams, our Founder, I knew this was a special place where dreams abound. We started with a handful of stores and a small catalog. We have seen our dreams grow into six brands, over 600 stores, seven catalogs, and one of the largest e-commerce businesses in the country. I believe we are successful because we understand that people love their homes and that their homes are very much a reflection of who they are. We also understand that our responsibility goes far beyond the products we sell. So many important events in our customers’ lives take place in their homes, and our job is to delight them with our service and help them create those lifelong memories. I am always amazed and gratified by how deeply this sense of responsibility lives within our culture and couldn’t be more proud – or certain – that it is core to our Williams-Sonoma family values. In closing in my final letter, I would like to thank you, our shareholders, for your confidence and continued support over all of these years. I would also like to offer my sincere thanks to our associates, vendors and customers for their continuing dedication to our company and the fulfillment of the dream. It has been, and will continue to be, a remarkable journey.
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Market Information
S T OC K
The following table sets forth the high and low closing prices of our common stock on the NYSE for the periods indicated.
Fiscal 2009 (52 Weeks)
High
4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
$23.23 $22.25 $14.70 $14.00
Fiscal 2008 (52 Weeks) 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
Low $18.95 $13.88 $10.61 $7.55
High
Low
$9.57 $19.44 $27.67 $27.72
$4.72 $8.91 $17.44 $22.00
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Company History
D E S I GN
“We like clean lines, natural textures, & sensible proportions.�
In 2002, the West Elm brand was launched with the mailing of our first West Elm catalog. This brand targets design conscious consumers looking for a modern aesthetic to furnish and accessorize their living spaces with quality products at accessible price points. West Elm offers a broad range of home furnishing categories including furniture, textiles, decorative accessories, lighting and tabletop items. In 2003, we launched our West Elm e-commerce website and opened our first West Elm retail store. We like clean lines, natural textures, and sensible proportions. Our inspirations include things like nature, color, art and ancient cultures, and we interpret these into classic pieces and decorative accents that make rooms calm, comfortable, and easy to live in. We design things that help solve every day problems – things that fold, stack, expand and slide to make life easier. Storage pieces that do double duty as room dividers. Beds with hidden drawers. Modular seating that grows with you. Our furnishings help customers live more streamlined, organized lives. We think that good design should also be affordable. Enduring style, good quality, and accessible prices give everything we make inherently good value.
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Our Future “We believe that all of these initiatives will improve our competitive positioning and allow us to take our business to the next level.�
VA L U E
As we look forward to fiscal 2010, our focus is on growing e-commerce and the five other key initiatives that have driven our momentum over the past year: (1) capturing market share through innovative merchandising and a greater emphasis on the ‘value’ proposition; (2) delivering superior customer service; (3) executing our catalog and Internet marketing initiatives; (4) driving efficiencies in our worldwide supply chain – particularly in furniture sourcing; and (5) maximizing profitability and cash flow through aggressive asset management and rationalization of our real estate portfolio. We believe that all of these initiatives will improve our competitive positioning and allow us to take our business to the next level, even with our belief that the economic recovery will be slow and gradual.
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Financial Data
I N V E S T
This graph compares the cumulative total shareholder return for our common stock with those for the NYSE Composite Index and the S&P Retailing Index, our peer group index.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN $160 $140 $120 $100 $80 $60 $40 $20 $0 1/28/05
1/27/06
1/26/07
2/1/08
1/30/09
1/29/10
Williams-Sonoma, Inc NYSE Composite Index S&P Retailing Index
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