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High-end retail hit by downturn
A Williams-Sonoma store on Michigan Avenue in Chicago.
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Kai Ryssdal: Williams-Sonoma jumped out of the frying pan and into the fire today. The high-end gourmet cooking and housewares chain reported a 42 percent drop in first quarter profits. It also said the rest of the year not looking so hot either.
Given the problems with real estate, it kind of makes sense that fewer are people buying things for homes they're not buying, but check the calendar for a second. June, right? Smack in the sweet spot for weddings -- and for wedding gifts.
Stacey Vanek-Smith reports now on why the season isn't registering.
Stacey Vanek-Smith: That stainless steel paella pan and porcelain souffle dish were must-haves in 2007 when Williams-Sonoma profits were in the double digits, but that was before the gravy train stopped running. Williams-Sonoma expects sales to drop about 10 percent in the next few months.
Burt Flickinger: This is the first time the high end's being hit in 75 years.
Retail consultant Burt Flickinger says normally economic downturns don't affect luxury retailers as much as lower-end stores, because people still want to splurge. But he says this time, things are different.
Flickinger: Right now, U.S. consumers are looking for the biggest bargains. There's a record amount of consumer coupon usage, luxury retail is really starting to struggle and the retail recession is just starting to hit.
Not to mention the wedding recession…. The 69 billion dollar nuptial industry is a huge chunk of Williams-Sonoma's business and Flickinger says retailers are seeing fewer wedding guests on registries and cheaper gifts... or different gifts.
30-year-old Erin Larson is getting married this summer. She and her fiance have a honeymoon registry. Larson says with the dollar sliding, it will help them live it up in Europe.
Erin Larson: And it means so much more to us to get the present of sunset cocktails on San Turini rather than a blender.
A lot of couples feel that way, says Anja Winikka, editor of theknot.com. She says department stores, cookware outlets and other traditional wedding gift retailers are having to fight everyone from charities to spas for the bridal buck.
Anja Winikka: They're registering for their lifestyles, so if they're really outdoorsy people, they make look to an outdoorsy sort of... REI. They may register at Home Depot...
Winikka says the top dream destination for brides is Italy and with the down economy, more brides may opt for a cappuccino in the Piazza del San Marco over the cappuccino maker back home.
I'm Stacey Vanek-Smith for Marketplace.
I like to poke around my local Williams Sonoma- it's like 'crack' for kitchen-geeks. I might not buy the expensive pots, pans, or electrics, but I love their sauces, smaller gadgets and the cooking and technique classes. When you are on a tight budget, perspectives have to change. What is cheap? What is free? Pounce on that.
Williams-Sonoma is being hit by this down turn is because the definition of luxury has shifted downward. The goods of William-Sonoma stores are of the highest quality I agree, but they are still mass produced and distributed. Luxury used to be a much more custom and personal business, and I think real luxury items still have this personal and custom base. Big box luxury stores service a wealthier than average customer, but mass producing these high quality items makes them cheap enough to attract a much wider customer base. This coupled with their large distribution made these stores very appealing to people fronting an artificially high social image. A trip downtown is easier than a trip to New York. In the end, this type of customer demand is credit driven, and unsustainable. The reason big box luxury stores like William-Sonama are suffering more than expected comes from there rise from being almost attainable to a larger audience.
When we got married we used HoneyLuna.com for our honeymoon registry! Even in an up economy, many brides and grooms already have their household items. We traveled for 6 weeks in Europe and our guests loved that they could buy us "experiences" and adventures rather than toasters and gravy boats!
Thank you for mentioning the benefits of a honeymoon registry and describing the attributes behind this increasingly mainstream registry option for engaged couples.
It is great to see how popular the honeymoon registry is becoming. When Traveler's Joy first started accepting Members over four years ago, we realized there was a large number of engaged couples that were not satisfied with the diversity of the traditional wedding registry market. Since then, the honeymoon registry has become a mainstream option for brides and grooms and the industry has experienced significant growth.
We are proud to have helped thousands of couples travel to destinations they may never have considered - a great feeling for everyone at Traveler's Joy.
I encourage you to contact us with any questions about our service. Most importantly, enjoy your honeymoon!
Best Regards,
Brandon Warner
President & Co-founder
Traveler's Joy Honeymoon Registry
www.travelersjoy.com
