Staff Reporter

It may have been a disappointing holiday season for most retailers, but not for the big home-furnishings chains.

Stores like Restoration Hardware, Crate & Barrel and Williams Sonoma Inc.'s Pottery Barn reported double-digit sales increases during the holiday period a time when the national retail industry posted sluggish sales gains of 2 percent to 3 percent.

Thanks to an industry-wide drought in innovative home furnishings, these smaller home-decoration retailers have carved out an impressive niche. Department stores and furniture chains like Levitz Furniture Corp., which sought bankruptcy protection last September, are not faring well compared to this new generation of specialty retailers.

Same-store sales at William Sonoma were up 20.5 percent during the holiday season over the same period in 1996, according to store officials. Restoration Hardware's same-store sales jumped a reported 32 percent.

Hot items included Restoration's $45 coffee-table dictionaries, which sold out early in the season. At Crate & Barrel in Century City, shoppers have an appetite for stylish silver-and-black alarm clocks, ranging from $21.95 to $49.95. Decorative napkin rings are also strong sellers, as well as chic picture frames.

"Frames always move quickly," said Jackie Tamura, Crate & Barrel's floor manager.

The reason these stores are hot, say industry observers, is they give shoppers what they want: new and exciting products.

"Fifteen years ago, before Crate & Barrel, you would buy everything at Robinsons and The Broadway," said Scott Kohno, president and chief executive at C & J Partners Inc., a retail consulting firm in Pasadena. "Because of their slowness in responding to market trends, they basically gave away their business."

Also fueling the home-furnishings switch, say industry observers, are changing demographics and a steady economy. Affluent baby boomers are buying first and second residences and shopping at these specialty stores to decorate their new homes.

"There's a huge baby-boomer group shopping at these retailers ... and they have more money," said Linda Frost, marketing manager at Century City Shopping Center, home to three home-furnishings specialty stores.

Specialty housewares retailers, say some industry observers, are seen as The Gap of the furniture industry. While chains like Levitz offer a vast selection of furnishings, stores like Pottery Barn and Crate & Barrel have an eclectic mix of casual, hip and stylish homewares at attractive prices.

"Every couple of weeks, Pottery Barn has a new look and new styles," said Geri Israel, 42, who shops there regularly.


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