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Remodel

Consumers’ homes are ‘their biggest asset’

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Williams-Sonoma CEO Laura Alber sits down with Yahoo Finance at the 2023 Web Economic Forum in Davos, Switzerland to discuss consumer home renovation cycles, sustainability trends and the interior design industry’s connections to the larger housing market.

Video transcription

DAVE BRIGGS: All right in Switzerland, our anchors Julie Hyman and Brian Sozzi caught up with Williams-Sonoma CEO Laura Alber, who described what it’s like to be part of the World Economic Forum in Davos.

LAURA ALBER: I always love coming here because it makes you think bigger. I mean, you’re around people who run much bigger companies and come up with great ideas. And I’m always really conscious of thinking about what’s next and ideas and inspiration and, you know, how to improve things.

JULIE HYMAN: So what are some of the ideas that you’ve heard about that you’re really excited about on that front?

LAURA ALBER: You know, I think there’s been a lot of talk about what’s going on, frankly. There is a lot of uncertainty, and the debate about recession, no recession. And you know, I was reflecting on that last night and thinking about the possibility and the importance of thinking long-term and not thinking too short-term, preparing for whatever may come, but building for the future.

BRIAN SOZZI: Laura, I can’t help myself. I used to cover retail stocks as an analyst for a long time. I want to go back to what you said and ask you about this. What’s Next – What’s the next big thing in retail? What should investors in this space know about?

LAURA ALBER: Retail is about serving consumers and what is important to them. And I believe that quality never goes out of style. People want things that last. I believe that sustainability is here to stay and here to stay, I must say. And it’s important that people bring products to market that meet those needs. And we see that customers really care about materials that are sustainable and don’t off-gas and all the things that we talked about and we put in our reports. But I can also tell you that consumers vote with their wallets when they buy our green – our certified products, especially in our children’s business.

JULIE HYMAN: Yes, as a customer I have to definitely look for those kinds of elements when looking at your products. Do you think your consumer is more resilient if there’s — or I shouldn’t say if there’s — probably when there’s an economic downturn?

LAURA ALBER: You know, I think everyone is worried right now. I mean, I don’t… I think it affects everyone’s thinking. Here we are talking about it. So I think you need to be so much better. You have to inspire. I mean, great retail– when you go to great retail, it takes you away. It makes you dream. We talked earlier about what we like to cook. And you know, nothing better than being invited to a great dinner party, right?

BRIAN SOZZI: Thanks for the chicken recipe.

LAURA ALBER: Yup.

BRIAN SOZZI: [INAUDIBLE]

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LAURA ALBER: We’re going to make some air fryer chicken. But I think people love their homes. And it’s something that – and your home is your biggest asset. And that is something that is so satisfying. When you redo a room or just hang some new wall decor, it really affects how you feel. And we all learned that in the pandemic. It became much more important to us. And we still work a lot more from home than we used to. And since things get expensive out there and stay expensive, it’s always nice to come back home. And clearly the best deal you have is at home.

BRIAN SOZZI: During the pandemic, it is very much a key topic here at the World Economic Forum. You had a lot of first-time home buyers, a lot of 30-somethings buying a home for their first time, probably going to a Williams-Sonoma and redoing their kitchen or bathroom. Now, a few years into the pandemic, where else can you see them remodeling their homes? What are they – in terms of product, what are they aiming for?

LAURA ALBER: People started projects and unfortunately they were difficult. Many things were on back order. It’s really hard to get people to work on your house. So there are people who are still really into doing these projects, whether it’s a kitchen or a bath remodel. And usually the cycle goes, you buy a home, you remodel, and then you buy the furniture that goes with it. The moment you take everything out of a kitchen or out of a closet or out of a room to rearrange and put it back in, you realize that you might need something to be able to place–

JULIE HYMAN: You have to get more advanced stuff to match the makeover, whatever it is.

LAURA ALBER: Exactly.

JULIE HYMAN: Not that I’m speaking from experience or anything like that.

BRIAN SOZZI: Of course not.

JULIE HYMAN: How closely do your sales track the housing cycle or are they somewhat separate from it?

LAURA ALBER: That’s a good question. It is difficult to know where the connections are. And we’ve tried to triangulate it over the years. I’ve been with Williams-Sonoma since 1995, believe it or not. I’ve been CEO since 2010. We’re always looking at everything from the stock market to housing, people moving, all those things. But there’s also the reality of just freshening up your house, right? And it’s a harder thing to quantify than some of the other more life-stage pieces.

We have a large business in the life stage. So we have built everything from your first apartment to a wedding to your first house for children. And now we actually make products, accessible products. And it has been a new launch that we brought this year at Pottery Barn. And you wouldn’t believe how successful these products are.

BRIAN SOZZI: Laura, what is the secret to CEO longevity? You are the only CEO of Williams-Sonoma that I know that I have covered. Pull back the curtain a little. What are you doing that might help your fellow leaders?

LAURA ALBER: I really don’t care. You know, I really care about the product and the people and think about making it better every year. You know what’s next? How do you make it more efficient? How do you motivate teams? How do you bring larger products to consumers? And how do you make it easier to decorate your home? How do you demystify what is very scary and expensive for many people?