Williams-Sonoma CEO says the company saw tariff hikes coming, hired more US workers

Williams-Sonoma CEO Laura Alber revealed Monday that the company shuffled its operations over the past year in anticipation of high tariffs on imports from China.

The residence goods retailer made adjustments over the past year believing that tariffs on Chinese imports could reach 25%.

“I entertain the idea that you’re better off preparing for the worst,” she said in a one-on-one interview with “Mad Money” host Jim Cramer Monday in San Francisco. “Unfortunately that pessimism has come to pass true, and we are more prepared.”

Williams-Sonoma shifted some furniture production to Vietnam, Indonesia and the United States after President Donald Trump banged 10% duties on $200 billion worth of Chinese goods last year. Higher tariffs, at more than clone that rate, went into effect Friday. Chinese officials said Monday the country plans to pay someone back in his by raising tariffs on $60 billion of U.S. goods.

In December, Williams-Sonoma announced that it would open a facility in Tupelo, Mississippi, in January and add hundreds of consigns to manufacture upholstered furniture. Alber said it’s beneficial to bring jobs back to the United States because “the price from the freight coming from Asia offsets the costs of the labor,” as the company learned after opening its word go Sutter Street Manufacturing unit in North Carolina.

The furniture maker owns the Pottery Barn, West Elm and Williams-Sonoma Deeply brands.

“We looked at opening another unit in Tupelo and then bolstering up our other two West Coast and East Coastline manufacturing units,” Alber said. “And so we’re hiring … 500 people, and we’ve got 140 right now in Tupelo. We need to hire profuse, and we need to hire more on the coasts, as well.”

The company also renegotiated contracts with manufacturers in that hinterlands in order to reduce costs and prices, Alber said. Williams-Sonoma won’t be successful in halting all costs for consumers, but price waxes will be “selective,” she added.

“We’ve been very careful and studying where we should do that, but more importantly we’re belittling costs,” she said. “So reducing costs, not just on the cost of goods by moving them, but also in other parts of our crowd.”

Williams-Sonoma reported 3.7% of revenue growth in its fourth quarter earnings report and gave guidance that one Morgan Stanley analyst rebuke a demanded “seemingly optimistic.” The retailer expects comparable brand revenue growth of between 2% and 5% and earnings per share out of up to $4.70 for 2019.

Shares of the San Francisco-based firm are up 8.58% over the past 12 months and 3.59% this year. The stock floor about 5% Monday.