On the two previous quarterly conference calls, company executives told analysts that the company is being "aggressive" in seeking rent reductions and would close some stores if it cannot renegotiate their leases. The 80% increase in planned store closures is believed to have something to do with that.

"We are trying to work with our landlords," Lester told analysts in March, at which time the company said it had negotiated rent reductions for 15 of its stores; it has not updated that number since that time. "It's a difficult problem for all of us, certainly as renewals come up we are able to negotiate much better lease terms than we had before. Obviously we've got to bring our occupancy costs in line with our sales at something close to historical levels and that's our goal and there's several ways to get there. We would prefer to get there by keeping our current store base and readjusting our expense structure and if we can't, then we'll have to get there by closing some of our stores and driving those sales into the remaining stores in those markets, so we'll see how it plays out… ."

Rob Kashian, a principal of the real estate services firm Retail West tells GlobeSt.com that Williams-Sonoma's ability to renegotiate its leases really comes down to whether or not the center a particular store is in is healthy or not, and whether or not the landlord can quickly backfill the space. While he believes a lot of the opportunities for rent reductions have already been realized, he agrees that more co-tenancy clauses will be triggered by additional bankruptcies following what is expected to be an average-to-subpar holiday season.

"As we start to move forward, activity picks up and more tenants enter the market their leverage goes down," he says. "It will depend on whether their current rent is over-market and how much of a reduction they want. A vast majority of their lease deals have them paying a percentage rent or reporting sales, so the landlord knows [how the store is performing]."

Williams-Sonoma's brands--Williams-Sonoma, Pottery Barn, Pottery Barn Kids, PBteen, West Elm and Williams-Sonoma Home--are marketed through its retail stores, seven direct mail catalogs and six retail websites. In the third quarter, the company earned $7.3 million, or $0.07 per share on sales of $729.3 million, the company reported Thursday. In the same year-earlier period, the company lost $11 million, or $0.10 per share, on sales of $752.1 million. Excluding one-time items such as asset impairment and early lease termination charges, profit in the latest quarter was $0.16 cents per share. Analysts, who typically exclude one-time items, expected profit of $0.05 per share on revenue of $686.1 million.

Williams-Sonoma's performance was in part due to the company lowering its selling, general and administrative expenses to $243.4 million from $259.9 million, helping push gross margins to 34.7% from 32% in the same year-earlier period. In addition, overall comparable store sales climbed 1.7% compared to the same 2008 period, which was a 21% decline from 2007. Pottery Barn and West Elm brands reported increases in same-store sales while Pottery Barn Kids, Williams-Sonoma and Williams-Sonoma Home posted declines.