Williams-Sonoma says longtime CEO Lester to retire

By Vinnee Tong
AP Business Writer / January 26, 2010

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SAN FRANCISCO—Williams-Sonoma said Tuesday that its longtime chief, Howard Lester, will retire from the posts of CEO and chairman after 31 years.

After his retirement in May, Lester will continue to advise the company until December 2012 as chairman emeritus, Williams-Sonoma Inc. said Tuesday.

Lester, who is 74, has run the San Francisco company since 1978, when he bought it from founder Chuck Williams and it had four retail stores. It now has more than 600 stores in the U.S., Canada and Puerto Rico; it also owns the upscale Pottery Barn and West Elm housewares chains.

"Howard has been an outstanding mentor, and he is retiring at a time when the foundation of the company has never been stronger," Williams-Sonoma President Laura Alber said on a Tuesday conference call with reporters.

The company's board plans to appoint Alber its new CEO. She joined the company in 1995.

"She is the perfect leader to succeed me," Lester said.

Alber, who is 41, has been credited with starting the company's Pottery Barn Kids and PBteen lines and for its expansion into the Middle East.

Alber said Tuesday that the company plans to open four stores in the Middle East this year, with further plans to be determined as they evaluate the performance of those outlets.

Meanwhile, Lester will receive $500,000 per year for consulting on real estate strategy and seasonal products as well as shareholder outreach. And he will get 125,000 shares and cash equal to another 125,000 shares that will vest between now and December 2012.

The CEO also walks away with a $175,000 cash payment for health care benefits plus administrative support and expenses during his time as a consultant.

He also gets a lifetime employee discount at the company's stores.

Costs associated with Lester's retirement will result in charges of 3 cents per share in the company's fourth quarter and 2.5 cents per share in the first quarter of 2010.

This is due to an acceleration in the vesting schedule for 4.6 million stock units and options Lester holds, as well as a grant of roughly $5 million in restricted stock he received Monday related to the company's 2009 performance.

On Tuesday, the company also reiterated a 2010 and fourth-quarter profit outlook it gave earlier this month.

It expects a fourth-quarter adjusted profit of 69 cents to 74 cents per share on revenue of $1.06 billion to $1.08 billion. Analysts polled by Thomson Reuters expect 73 cents per share.

For the year, Williams-Sonoma expects earnings of 54 cents to 59 cents per share on revenue of $3.07 billion to $3.09 billion.