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Williams-Sonoma to Make British Debut Next Year

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Williams-Sonoma currently operates a mail-order service to over 75 countries. (Photo: Paul Monaco)
Williams-Sonoma currently operates a mail-order service to over 75 countries. (Photo: Paul Monaco)

FINANCE

  • Williams-Sonoma to open shop in London within first half of 2012
  • WSM rating downgraded by S&P and Stock Scouter
  • UK becoming popular alternative for overseas expansion

San Francisco-based Williams-Sonoma retail chain is making plans to bring its gourmet cookware and upmarket furnishings to the United Kingdom. Williams-Sonoma hopes to debut its first UK store in London, seeking a 5,000 to 8,000 square foot unit for its new shop.

Williams-Sonoma, which currently operates a mail-order service to over 75 countries, has appointed Property Agent Harper Dennis Hobbs to assist in securing their first store, which is set to launch within the first half of 2012.

Stock Drops

Williams-Sonoma (NYSE:WSM) was among the many stock-droppers last week, closing at $34.74 on August 4 and dropping to $32.66 on August 5. WSM hit a 52-week low of $24.57 and a 52 week high of $45.48 within the past year.

Although the stock has been demonstrating support around roughly $32.45, WSM is also experiencing resistance near $35.95, with a dividend yield of 1.96%. The stock's technical indicators are predicting a bearish, or downward moving, trend. Like the US government and US Treasury Bonds, Williams-Sonoma's rating has been downgraded by the S&P to 3 out of 5 stars.

The company, who has an average daily trade volume of $1.8 million and a price-earnings ratio of $16.84, has also received a neutral 5 out of 10 rating by Stock Scouter. Keeping in mind the common saying “buy low, sell high,” the company's stock future seems very uncertain.

Williams-Sonoma has over $3.5 billion in sales, and received the number four slot on Furniture Today's Top 100. The publicly held, New York-listed company grew pretax profits by 9.2% last year.

The retail group owns over 560 stores in the US and Canada, including those from a variety of home furnishing labels including Pottery Barn, Pottery Barn Kids and eponymous stores. Williams-Sonoma Home and West Elm are subsidiary brands under the high-class retail chain.

Despite the Economy, US Retailers Move to the UK

Williams-Sonoma is not the only American retailer planning to expand oversees. Competitor and sister brand of Crate & Barrel, CB2, is also understood to be strategically targeting the UK furniture market, looking for 5,000 square feet to set up in the London. These new-comers will have to compete with local well-established competitors Lakeland, John Lewis and The White Company.

Retail property expert Hugh Radford for DTZ says that “London is a safe bet to begin expansion if you are an overseas retailer.” London is known for being a good source of unique shopping due to its variety of oversees retailers.

Key Statistics – Global Homeware Market (source: Datamonitor)

  • The global homeware market is expected to have a value exceeding $324 billion by 2014, an increase of 15% since 2009.
  • The largest global homewares market sector is home hardware, which accounts for over 44% of the market's total value.
  • The Americas account for over 41% of the global homewares market value.

By Nicole Manuel for
Nicole Manuel is a freelance economics, finance and blog writer with a degree in economics and over two years of experience.

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