Williams-Sonoma, Inc. (WSM), a well known specialty retailer of home products, recently added a new category of products by introducing table and floor lamps, under its famous brand, Rejuvenation. The products will be produced under a partnership with veteran manufacturer O.C. White, a Massachusetts-based company doing business since the late 1800s.
Rejuvenation offers lamps, clocks, shop furnishings, home products and hardware. The brand is known for its traditional designs. On the other hand, O.C. White offers industrial lamps inspired from early 1900s. Therefore the contract with O.C. White is expected to perfectly compliment Williams-Sonoma’s portfolio of products.
Per the partnership deal with O.C White, Rejuvenation will re-introduce 6 of the O.C White lamps, including famous designs like Lone Rock Bench-Mount Table lamp. These lamps are known for their practical use and intrinsic designs.
We believe that the expansion of product portfolio is a great way to ensure profitability of the company. In this context, the introduction of a new line of products by William Sonoma’s Rejuvenation brand has been perfectly timed, with the housing market recovery gaining momentum. Owing to lower cost of borrowing and rising house rents, demand for new homes is gradually picking up. The rising demand for new homes has automatically led to a favorable situation for companies producing home products.
We currently have a Neutral recommendation on Williams-Sonoma. The stock carries a Zacks #2 Rank (short-term ‘Buy’ rating).
We are positive about the company’s strategy of product introduction and its long term strategy of global expansion. We believe, Williams-Sonoma is going to witness an increase in demand owing to the improvement of the housing market. However, we prefer to stay on the sidelines until there are further improvements in the global macroeconomic conditions.
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