While retail sales slipped somewhat, direct sales dropped significantly for Williams-Sonoma Inc. in 2009.
Overall the, company pulled in $3.1 billion in total revenue, down from $3.36 billion in 2008.
Direct revenue dropped, both in total dollar amount and in the percentage of the firm’s net revenue. The $1.4 billion the channel generated in 2008 amounted to 41.6% of the firm’s revenue, while the 1.22 billion it pulled in during 2009 was only 39.5% of revenue.
While total direct revenue was off by 12.5%, online revenue fell by only 8.7%, making up $943 million during the year as opposed to $1.03 billion.
Don’t look for this to turn around: Projections for 2010 call for the company to cut catalog distribution by between 1% to 3% from 2009’s level.
Despite this, operating margin seems to have improved for the direct channel. In a statement accompanying the financial results, chairman and CEO Howard Lester said “During the most severe recession in recent history, we delivered the highest operating contribution in the history of our direct-to-consumer segment.”
Lester didn’t offer details, nor did the company provide breakouts of exactly what the operating margins were. But part of the reasons direct margins may have improved is a shift to the online channel – which is evidenced by online revenue falling more slowly than offline sales.
There was some good news for direct during the company’s most recent fourth quarter. Retail revenue rose 7.9% over 2008’s fourth-quarter level, to $692 million. But direct revenue jumped 8.4%, to $398 million. And within that Internet revenue was up 14.9%, to $309 million.
