To give you an idea of how tough things are at Williams-Sonoma (NYSE:WSM) right now, the company is selling off a corporate plane to raise cash.

It's actually not a bad idea, considering that balance-sheet cash was down by more than 77% year over year, according to first-quarter results. So its earnings weren't quite as tasty as the company's $16 barbecue sauce. Revenue slipped 4.2% while retail space actually increased by 6.9%. Same-store sales declined by 9%, with double-digit drops for Pottery Barn and outlet stores (at Williams-Sonoma itself, those sales were down 4.8%).

Even worse, the company revised revenue guidance that had already been reduced in previous earnings results; it now expects revenue to drop by up to 5.2% and same-store sales decreases of up to 8.3% for fiscal 2008.

This isn't surprising: Retail earnings have been hit especially hard lately. Sears Holdings (NASDAQ:SHLD) lost money in its latest quarter, and Bed Bath & Beyond (NASDAQ:BBBY) and Restoration Hardware (NASDAQ:RSTO) haven't fared much better. The one bright spot in home-based retail is Pier 1 (NYSE:PIR), which is gaining speed in the midst of a turnaround.

In spite of the challenging environment, Williams-Sonoma still plans to increase its store base, adding 51 stores for fiscal 2008 and remodeling 20 others. With large same-store sales declines, I can see how the company is looking to increase revenue wherever it can, but aggressively opening new stores may not be the best strategy, considering the dismal economic outlook.

The company plans to cut catalog circulation by up to 19% this year, but I think it could go even further than that. Direct catalog revenue was $96.7 million for the first quarter, or 12.3% of total revenue. And while the company estimates that 60% of sales (excluding gift registry sales)  are attributed to catalogs, consumers certainly don't need to receive weekly catalogs for every Pottery Barn concept under the sun. From the looks of it, Williams-Sonoma's more successful direct-to-consumers revenue is generated via the Internet, which accounted for 32.2% of total sales and increased 8.7% in the first quarter.

Williams-Sonoma looks like it's dedicated to cutting costs where it can -- as seen with the corporate jet. However, with a dismal revenue outlook, selling frivolous corporate assets may be the best cash-generating method Williams-Sonoma may have for some time.

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