Laura Alber loves Williams Sonoma. Like, really loves it. Sure, many Fortune 500 CEOs would say the same of their companies. But Alber’s devotion to the $8.7-billion-in-revenue home furnishings retailer—from growing its global business to studying French porcelain—borders on fanaticism. “It’s my heart,” she says. In fact, she likens it to a spouse. When asked if she would ever consider another CEO job, she quickly answers no. “I’m not looking for a different husband either,” she said to laughs at the Fortune Most Powerful Women Summit in October.
In fact, Alber’s 13-year tenure as Williams Sonoma CEO has outlasted many marriages. She’s now the longest-serving female chief executive in the Fortune 500.
The Gap Inc. alum joined San Francisco–based Williams Sonoma in 1995 as a senior buyer for its Pottery Barn brand. She got the top job in 2010. At 42 years old, she became only the fourth CEO of the now 67-year-old retailer named after founder Chuck Williams and the location of its first store, Sonoma, Calif.
Since then, Alber has grown top-line revenue at the retailer by $5 billion. She’s capitalized on its advanced e-commerce operations and leaned in to its well-defined aspirational aesthetic. The release of Williams Sonoma’s over-the-top holiday catalog has become a tradition akin to Starbucks’ red cups—as has the internet’s subsequent hater’s guide, a satire of the catalog that’s made it all the more famous. (This year’s potential wish list items include a $1,499 faux Christmas tree.)
But all that brand loyalty and online mockery is under pressure. Inflation, high interest rates, and an uncertain economy are causing even Williams Sonoma’s well-heeled customers to pare their spending, forcing Alber to explore new revenue streams to maintain her hot streak. For the past 10 years, Williams Sonoma has averaged a total return to shareholders of nearly 14%. “You can’t wait for a macro trend to improve your business,” she says. “You have to make it happen and look for other opportunities to grow.”
Alber has created a business line from scratch before. In 1999 she was pregnant with her first daughter and disappointed with the market for kids’ furniture and decor. Just “Winnie the Pooh and Laura Ashley,” she recalls. So she gathered with a group of female colleagues after-hours to develop a pitch for Pottery Barn Kids, the first children’s lifestyle home furnishings brand, one that helped kids express their identities—albeit kids whose parents could afford now-$1,795 trundle beds. The test was the most successful catalog the company had ever mailed based on sales per book. Pottery Barn Kids and its offshoot Pottery Barn Teen, which took off in the 2000s with its lime green bedrooms and neon beanbag chairs, generated 13% of Williams Sonoma sales in 2022.
What appealed to those first Pottery Barn Kids customers still appeals to Williams Sonoma customers today—and justifies the brands’ premium price points, Alber says: “They’re coming to us because they want design and quality. You might have to stretch or wait, but hopefully it’s the sofa that lasts for life, [so] that when you move to a different place you can give [it] to someone else and it still holds up.”
Alber’s first big promotion was to run Pottery Barn’s catalog business, which at the time was an outlier in an industry that mostly sold furniture in stores. The brand only had a catalog at all because its sister brand Williams Sonoma, focused on kitchenware, sold via catalog. “It was the first thing I owned, top to bottom and start to finish,” Alber says. It gave her—and the company—critical skills for the e-commerce era, from product storytelling to direct-to-consumer shipping. Other legacy brands struggled with the eventual shift online, but Williams Sonoma’s catalog business made it e-commerce-ready. Its first experiment with online sales was for its wedding registry business in 1998; 66% of total sales were online in 2022. “We always say it’s the poster child for multichannel,” says Evercore ISI analyst Oliver Wintermantel.
“You can’t wait for a macro trend to improve your business. You have to make it happen.”
Laura Alber, CEO, Williams Sonoma
That agility served Williams Sonoma well when the pandemic hit a decade into Alber’s CEO tenure. So did Williams Sonoma’s decision to pay retail employees when COVID shut stores. The move earned the trust of a creative workforce that dived into the challenge of remotely advising customers on how to outfit their homes for the work-from-home era.
While other home goods retailers have struggled in recent years—see: the Bed Bath & Beyond bankruptcy or the troubles plaguing home-improvement retailers like Lowe’s and Home Depot—Williams Sonoma’s high-earning consumer, luxury product, and multichannel strategy helped it thrive. Few luxury home furnishings and lifestyle competitors have Williams Sonoma’s scale. “They are a leader in the categories they compete in,” says Jefferies analyst Jonathan Matuszewski. Between 2019 and 2022, comparable brand revenue soared 45%, though annual growth slowed to 6.5% by the end of 2022.
The company’s stock has outperformed the market, up 36% year to date; analysts cite a higher-than-average operating margin for the share price’s strength.
But some headwinds are approaching. Private equity firm Leonard Green’s funds have been buying up shares of Williams Sonoma for what it has said is a passive stake, now over the 5% mark. The firm is known for purchasing retailers including the Container Store and Joann, the fabrics and crafts retailer. More recently, it has stepped into the home category with the purchase of the Shade Store. Leonard Green declined to comment; Williams Sonoma said it is “thrilled to have Leonard Green as an investor.”
Moreover, consumers—even well-off ones—are spending less on big-ticket items amid high inflation and an uncertain economy. After so much time at home, consumers are putting extra income toward services and experiences. Interest rates as high as 8% are forcing homeowners to stay put; 82% of homeowners interested in moving felt “locked in” by their current interest rate, a Realtor.com survey found earlier this year. That eliminates a big occasion to buy new furniture, decor, and kitchen gear.
The housing slowdown is hitting the West Elm brand hardest; its sales fell 20.8% in the second quarter of 2023 compared with the year prior. It’s better known for furniture, and its core customers—design-minded millennials upgrading to a $4,459 sectional, for example—are spending less. The flagship Williams Sonoma brand, with its $199.95 nonstick pans and $39.90 hot chocolate mix, is faring better, down less than 1% in the same time frame. (And, Alber points out, the pandemic years were outliers for booming furniture sales.) But Williams Sonoma’s portfolio of nice-to-have brands could hurt the company if discretionary budgets get even tighter. “If your sofa falls apart, you don’t really need a new sofa, right? You can push it into next year,” says Wintermantel. “If you have a leaky roof or a washing machine breaks, you’re replacing that.”
“People are having a hard time moving right now, but that doesn’t mean they don’t love their homes,” Alber says. “Life stage” categories like baby and dorm rooms are still strong, Alber says. And other categories, like cooking and decor, are relatively recession-proof, she argues: “It’s a much bigger decision to redo your whole family room than it is to buy some beautiful napkins for the weekend.”
The holiday season, typically a crucial quarter for the company with 28% of sales last year, will be a significant test. “People buy gifts in any economy,” Alber says. “We sell beautiful, functional things” that customers may give or request as gifts, even if they’re reining in how much they spend on themselves, Alber says.
Williams Sonoma’s annual revenue has more than doubled since Alber became CEO, and she’s aiming to double it again. She’s pursuing that goal via its business-to-business division, which started with corporate holiday gifts and now furnishes offices, hotels, and stadiums. (It grew 27% to nearly $1 billion in the 2022 fiscal year.) B2B sales require different methods of shipping and testing (to ensure, for instance, that a bench can withstand the high traffic of a hotel lobby). A 2023 goal was standardization, to resolve outstanding pandemic-related supply-chain issues and ensure consistent service. Alber is eyeing franchise-first global expansion too. India, for example, just got its second Pottery Barn.
“If you’re in a company where the product is fantastic and the opportunity is there, it might be worth staying through some of those tribulations.”
Laura Alber, CEO, Williams Sonoma
Next up is AI. Alber sees the technology as a tool to improve customer service, and she’s gotten an up-close look at its potential via her seat on the Salesforce board. “Furnishing a house is really daunting. Even if you understand beauty and design, the spatial relativity of furniture is a big problem for most people,” she says. “What if we can take all the best designers and all the best rooms ever built and dump them together?”
Even as she considers the future, Alber prides herself on staying present as a CEO, rather than looking for other opportunities. She says she’s never even interviewed for a job outside Williams Sonoma since joining 28 years ago. No surprise, she values loyalty and preaches resilience. “Oftentimes, you see people pop out the minute something goes wrong,” she says. “Especially if you’re in a company where the product is fantastic and the opportunity is there, it might be worth staying through some of those tribulations.”
Her most pressing tribulation at the moment is the uncertain economy. She’s a self-described worrier but tries not to obsess over things outside her control. She’d rather spend time solving the problem at hand. “I just assume it will stay like this,” she says. “If you plan for this to be your new normal, you get much more innovative.”
A version of this article appears in the December 2023/January 2024 issue of Fortune with the headline, "In focus: Laura Alber."
