At just under $1.4 billion, direct revenue dropped by $264.7 million, or 15.9%, from 2007’s $1.66 billion. With the exception of its PBTeen brand, all of its lines experienced direct-to-customer channel revenue declines.
Direct to customer made up 41.6% of Williams Sonoma’s business during 2008, a slight tick down from the 42.2% it comprised in 2007 and 2006. The company dropped its catalog circulation in 2008 by more than 20%, from 393.2 million in 2007 to 313.7 million in 2008. The catalogs were thinner, too: Actual page count fell by more than 30%.
The company cut its direct-to-consumer costs by $45 million during the year.
During 2008, catalog revenue fell from $560 million in 2007 to $356.6 million, while Internet revenue slipped from $1.1 billion to $1.03 billion.
The company is aware that decreasing its catalog circulation will have a negative effect on other channels. In a note within its filing, the company acknowledged “approximately 40% of our company-wide non-gift registry Internet revenues are incremental to the direct-to-customer channel and approximately 60% are driven by customers who recently received a catalog. We do, however, expect to see this percentage begin to decrease as we continue to reduce our catalog advertising costs and increase our investment in other Internet marketing vehicles….”
For the year, Williams-Sonoma pulled in $3.36 billion, a drop from the $3.94 billion it generated in 2007. Net earnings fell from $195.8 million a year ago to $30 million.
For 2009, the company expects its overall net revenue to drop between 12% and 17%.
The Historian’s Take: With just under 314 million catalogs circulated, 2008 marked the lowest catalog distribution since Williams-Sonoma’s fiscal 2002, when it sent around 279.7 million books. Granted, the Internet wasn’t as omnipresent as it is today…
