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To Boost Growth, West Elm is Launching a Hotel Chain

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On Monday, modern home-furnishing chain West Elm, owned by Williams-Sonoma Inc. (WSM - Free Report) , announced it is launching a boutique hotel chain, dubbed West Elm Hotels.

The first hotels will open towards the end of 2018 in Charlotte, NC; Indianapolis, IN; Detroit, MI; Savannah, GA; and Minneapolis, MN, all smaller cities where the price of real estate is much more affordable. West Elm is partnering with DDK, a hotel management group, and plans to announce more locations at a later date.

According to Bloomberg, this new idea should help West Elm evolve into a “lifestyle brand.” “The new hotels will be furnished with pieces that reflect the chain’s modern aesthetic, as well as local decor from the region,” they said. 

While this is a business departure for the company, it’s a strategic move that West Elm hopes will boost currently stagnant growth. Even though it is Williams-Sonoma’s best performing subsidiary—its same-store sales increased 16% last quarter, compared to Pottery Barn’s 4.8% decline and Williams-Sonoma’s brand flat performance—the retailer, who has depended on catalog and brick-and-mortar sales, has been hit hard by consumers’ online shopping preferences.

The furnishings in the hotels will be for sale, and a hotel is an innovative way to showcase West Elm’s wide range of home products. For example, if guests like a particular light fixture or armchair, they’re able to see the product in action, test it out, and decide if it will work in their homes.

“We’ve created an active bond with our customers that can extend beyond home and work,” Jim Brett, West Elm’s president, said in the statement.

West Elm told Quartz that prices will be about $200 a night, and suites will go for around $400 a night. Each property will have between 100-150 available rooms.

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