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West Elm’s next furniture showroom will be a hotel

September 28, 2016 09:24 AM
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(Bloomberg)—West Elm, the housewares brand owned by Williams-Sonoma Inc., is the latest retailer to look outside the mall for growth.

The retail chain plans to open a line of West Elm hotels, with five locations beginning to open in late 2018. The company is working with hospitality-management firm DDK on the project, according to a statement Monday. The hotels will serve as showrooms: Guests will be able to purchase room furniture and decor online.

West Elm joins a growing faction of retailers seeking to hedge their bets. Though West Elm has been the best-performing division of Williams-Sonoma, No. 21 in the Internet Retailer 2016 Top 500 Guide, the expansion into hotels would make the company less reliant on an often-shaky retail industry. Others are making their own efforts to diversify: Urban Outfitters Inc. (No. 39) agreed to buy a pizza chain last year, and Barnes & Noble Inc. (No. 54) is opening new concept stores with restaurants attached.

Other hotel chains have sold their robes, towels and mattresses online. The Westin chain in 1999 rolled out its Heavenly Bed, which was custom designed to impart a sense of luxury, with layer upon layer of sheets, blankets and duvet covers, and piles of pillows. Westin, part of Starwood Hotels and Resorts Inc., began selling it online in 2009 when it launched its online store, which also featured bath products and more. Westin was one of Internet Retailer’s Hot 100 online retailers that year.

For West Elm, the idea is to build a lifestyle brand. The new hotels will be furnished with pieces that reflect the chain’s modern aesthetic, as well as local decor from the region. The first locations are slated for Charlotte, North Carolina; Detroit; Indianapolis; Minneapolis; and Savannah, Georgia.

“We’ve created an active bond with our customers that can extend beyond home and work,” Jim Brett, West Elm’s president, said in the statement.

West Elm, which has almost 100 locations in the U.S., Canada, the U.K. and Australia, includes local designers in its store assortments and has pledged to make 40% of its assortment Fair Trade Certified by 2019. The retailer also has teamed up with upstart companies like Casper Sleep (No. 290), which sells mattresses online.

The approach has helped West Elm outshine the other divisions of San Francisco-based Williams-Sonoma. Its same-store sales jumped 16% last quarter, compared with a 4.8% decline for Pottery Barn and a flat performance for the Williams-Sonoma brand.

 

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