For Subscribers

Get the complete article now!

An analyst rates the performance of William-Sonoma CEO Howard Lester and his management team.

“When you look at Williams-Sonoma's record in brand building in a category that presents a lot of opportunity for strong brands because it's a highly fragmented category, these guys have done a terrific job. Lester is a big part of that, as are the people who work for him. Their bottom line record has been spottier from the standpoint of driving consistent profitability levels because they tend to be extremely enthused about building their brand, which is a top-line mentality. However, from time to time, and there have been a lot of times when the earnings are great, they will build a brand to the detriment of the bottom line over the short term. If you look back, Williams-Sonoma just had a fourth quarter in which they missed some numbers, and it was very clear that it wasn't the top line that was the issue. It was the expenses. And so to the extent that they grew the business and from time to time didn't grow the systems perhaps as rapidly, there have been some issues there. They continue to take the right steps to change that, so that's something they've recognized."