Photo: Sur La Table
Is Sur La Table too late for the home cooking craze?
Sur La Table found a buyer at a bankruptcy court auction and so will get a chance to take advantage of the resurgence in home cooking amid the pandemic.
The luxury kitchen goods retailer, founded in 1972, filed for bankruptcy on July 9 with plans to liquidate 51 of its 120 locations and find a buyer.
In court documents, CEO Jason Goldberger said that, while pandemic-forced store closures exacerbated liquidation constraints, the retailer had been in “financial distress” before the pandemic and saw a “meaningful revenue decline for the past five years.”
Like many peers, Sur La Table struggled against “the shifting of sales from traditional brick-and-mortar retailers to online retailers, a marked decline in at-home cooking, and changing consumer preferences,” he said.
A bright spot was in-store cooking classes. Over 650,000 people took the retailer’s classes in 2019, representing growth of 19 percent. Sur La Table also has a “lucrative online business” with a store footprint “disproportionate to market demands,” Mr. Goldberger said. In fiscal 2018, retail accounted for about 67 percent of sales; e-commerce, 23 percent; and cooking classes, 10 percent.
The buyer, Marquee Brands, owns a number of luxury brands, including Ben Sherman, BCBG and Destination Maturity. The $89-million acquisition is expected to complement its Home and Culinary portfolio that includes the Martha Stewart and Emeril Lagasse brands.
Marquee Brands agreed to acquire at least 50 leases and will continue the cooking classes, describing them as “a pioneer in experiential retail and unprecedented customer loyalty.” It is now offering online classes for $29 each.
Online growth will also be a priority. As part of the acquisition, Marquee Brands partnered with CSC Generation, a business founded by serial entrepreneur Justin Yoshimura with a mission of helping brands become “digitally native.” CSC’s recent acquisitions include online furniture and appliance seller DirectBuy and home furnishings retailer Z Gallerie.
In a statement, Carolyn D’Angelo, president of Marquee Brands’ Home Division, said Sur La Table’s “storied legacy along with its multi-channel platform featuring experiential brick and mortar stores, a thriving e-commerce business, and unparalleled education offerings presented an incredibly compelling opportunity. We believe a revitalized Sur La Table will thrive in a post-COVID-19 retail environment.”
- Marquee Brands Acquires Sur La Table – Further Expanding as a Leader in the Home and Culinary Industries – Marquee Brands/PRNewswire
- Declaration Of Jason Goldberger In Support Of Debtors’ Chapter 11 Petitions And First Day Motions – Sur La Table/New Jersey Bankruptcy Court
- CSC Generation, Marquee Brands Top Fortress in Sur La Table Bankruptcy Auction – The Wall Street Journal
- Sur La Table to Restructure Its Retail Footprint and Complete a Going-Concern Sale via Voluntary Chapter 11 Process – Sur La Table/Business Wire
- Sur La Table files for bankruptcy protection, plans to close nearly half of its stores. Here’s the list. – USA Today
- Jason Goldberger is cooking up digital growth as the new CEO of Sur La Table – Seattle Business Journal
Discussion Questions
DISCUSSION QUESTIONS: Is Sur La Table primed to take advantage of current market realities as-is or does it need to reposition itself? Where do you see Sur La Table’s strengths and weaknesses amid the current COVID-19 restrictions and afterwards?
Poll
BrainTrust
Lisa Goller
B2B Content Strategist
Chuck Palmer
Senior Advisor, ConsumerX Retail
Sur La Table was struggling prior to the pandemic, so this is just an acceleration of what would have happened eventually. While online cooking courses would be the place to make a shift, I feel like they are behind there with Bon Appetit dominating. Marquee paid a pretty reasonable price – I could see them licensing out the name and wouldn’t be surprised if you saw the brand at TJX soon.
Sur La Table is a brand and companies like Marquee brands are in the business of exploring brand (not necessarily owned retail) options for its portfolio. Licensing, retail partnerships, branded experiences — all are on the Sur La Table “table” and, no doubt, Marquee is considering a combination.
Sur La Table is a great brand and whoever is buying it recognizes that value. The consumer behavior in this category is shifting and a smart marketer will understand the opportunities beyond just a retail brand. Cooking at home is on the rise. Online classes, fresh food offerings, and more are what will take a traditional brick-and-mortar and digital retailer into being integrated into their customers’ new way of living post-COVID-19.
More home cooking and less travel will inspire more of us to bring a taste of France to our cuisine. Tech and logistics partners will help Sur La Table evolve and reach consumers who seek exotic culinary escape.
Is there very much you can buy at a Sur Le Table that you can’t get (for less) online? Cooking classes aside, retailing undifferentiated brands and competing with the mega e-retailers is not an easy game to win at.
Totally with you on this Peter. At least here in Scottsdale, Sur Le Table is very expensive – kind of the Whole Foods of kitchen stuff. It’s easy to get the same brands or equivalent much cheaper online. And, ironically in healthy times at least, those who wouldn’t care about the price are not typically your home-cooking crowd. Perhaps C-19 is changing that, but I doubt it.
If Sur La Table were a startup, their online cooking class platform combining fresh cooking with the ability to sell “authentic” cookware and kitchen tools available for purchase in the heat of thousands of interactive digital cooking moments, a startup star would be born. Reverse engineering Sur La Table means closing many brick-and-mortar stores, bringing Sur La Table’s online cooking class into more homes and inspiring new cookware purchases, thereby creating a new cult of Sur La Table foodies. The brand, the branding, and the desire is there ready to be reformatted into “hey have you heard about the new, very cool online cooking classes?”
Better late than never, as they say. But they need something more than expensive products and online cooking classes to make customers care. I don’t know how they’ve qualified their “unprecedented customer loyalty,” but their customers are definitely the place to start. What do they still need? What are their pain points at home nobody else has addressed? How can they re-shape the cooking experience now and out into the future? If they start to answer those questions (or maybe just start asking them throughout their culture) they’ll thrive. If not, they’ll likely be super successful at maintaining the status quo.
My wife is a chef by training, so we’ve known Sur La Table forever – great store, great brand, great cooking classes. And in a Depression, we shouldn’t be shocked to see them fade away. As Ian notes, it’s very expensive stuff (great quality though) that lots of people would treat as a luxury — not where you’d spend your money today. It’s not the pandemic restrictions, it’s the price tag.
Unfortunately for Sur La Table, their stores were fairly undifferentiated from competitors like Williams Sonoma. Plus, those competitors had long ago learned how to leverage their loyal customers through online purchases. While the cooking classes are a fan favorite, it’s not enough to sustain their business without something else. Most of their products in-store could be found elsewhere and at better prices. A smaller footprint coupled with something new and inspiring in their in-store experience could change that. They will also need to focus on how to leverage their digital experience with loyal customers to keep them coming back.
Like most current retail discussions, Sur La Table should be looking at this as a tabula rasa (see what I did there?) opportunity. When it was primarily a store and catalog business, it’s key advantages were the robust in-store classes and it not being Williams-Sonoma (without much differentiation, really).
They have an opportunity to rationalize their assortment, shift focus to digital first, introduce a relevant loyalty program and amp up reasons for consumers to lean in.