Williams-Sonoma announced Monday that a turnaround at its Pottery Barn division and reduced markdowns fueled fourth-quarter profit of $88.4 million, up from $12.2 million a year earlier, while revenue increased 8.1 percent to $1.09 billion.
The retailer found “significantly greater than expected benefits” from recent supply chain initiatives, CEO Howard Lester told analysts after the company announced higher fourth-quarter sales and profits.
Lester said those initiatives included “implementing distribution accuracy programs to significantly reduce inventory shrinkage and customer service” and centralizing regional furniture inventories and handling more distribution center activities now performed by third parties.
“We have been in-sourcing our Ohio delivery hub to bring company-managed volume to over 40 percent and reduce damages and replacement, and aggressively managing inventory flow to reduce distribution square footage by 16 percent,” he said. The company also has reorganized its Asian furniture supply network.
Lester said the company is taking over more work from third-party contractors at furniture delivery hubs and is reducing packaging to lower distribution costs. The company also plans this year to consolidate its two East Coast distribution centers into one, a move that Lester said will eventually yield savings in rent, utility and labor costs.
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