Are there too many chefs in the kitchen for Williams Sonoma

Wall Street has not been kind to Williams-Sonoma. A year ago, shares in the kitchenware and home furnishings retailer traded above $75. Today the stock price hovers below $47.

That decline, no doubt, is part of what’s driving the retailer’s move into new and unexpected businesses.

With the company’s next earnings report expected in mid-November, the owner of Pottery Barn, West Elm and the eponymous seller of high-end cooking gear, has taken to announcing initiatives that have generated a fair amount of press.

First, came news that West Elm would enter the hotel business.

And now Williams-Sonoma has announced its entry into the meal-kit business dominated by start-ups such as Blue Apron.

Certainly there are reasons to think Williams-Sonoma will do well in meal kits. Foremost among these is that the brand name is synonymous with a level of sophisticated cooking.

Yet there are reasons for doubt as well...chiefly that the meal-kit business is having problems of its own.

Data from Checkout TrackingSM shows that more than half of consumers who sign up for a meal-kit delivery system from the three biggest players in the space wind up cancelling.

Source: The NPD Group/ Checkout Tracking SM Online
Period: 12ME September 2016

Subscription Service Share of Buyers* that Cancelled Subscription
Blue Apron 57.2%
Hello Fresh 55.4%
Plated 55.1%

* Buyers who initiated the subscription within the year

For more about Williams-Sonoma, take a look at this earlier blog post.

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