When shoppers fish for home decor, Pier 1 wants to be sure they catch something. The company sells more than 6,000 items (imported from more than 50 countries) through more than 1,050 Pier 1 Imports stores across North America. Its stores offer a wide selection of indoor and outdoor furniture, lamps, vases, baskets, ceramics, dinnerware, candles, and other decorative accessories. Pier 1 To-Go allows shoppers to order and reserve items online for pick up and payment in its stores. In addition, the company supplies merchandise to about 45 stores in Mexico owned by Grupo Sanborns. In a bid to boost profits, Pier 1 has shuttered more than 200 stores, slashed spending, and refined its merchandise assortment.
Pier 1 Imports operates about 970 stores in 49 US states and another 81 locations across Canada. The company supplies merchandise and licenses its name to in-store departments at 47 Sears stores in Mexico and one in El Salvador.
After a five-year dry spell, marked by falling sales and stubborn unprofitability, Pier 1 Imports is back in growth mode. The home retailer's fiscal 2012 (ends February) sales increased 10% vs. the prior year, while net income increased 69% over the same period. Same-store sales increased 9.5% in fiscal 2012 compared to the prior year, spurred by an increase in store traffic and increased spending by customers. Indeed, sales per average retail square foot at its stores was $184 in 2012, up from $152 in 2010. Still, the $1.5 billion rung up at Pier 1 stores in 2012 was well below its $1.9 billion in sales seven years ago. While Pier 1 has a way to go to return to pre-recession sales levels, the chain appears to be headed in the right direction based on the its strong finaical performance in fiscal 2012 and 2011.
Pier 1's improved performance follows the downsizing of its store and distribution networks. Looking to the future, the retailer in 2012 unveiled a three-year plan to drive sales and profitability. It aims to boost sales per retail square foot to $200 (up from $184 in 2012) and achieve operating margins of at least 10%. Through 2014 the company plans to invest $200 million from operational cash flow to fund upgrades in existing stores (such as the installation of new lighting and air conditioning equipment) and to open new locations. Pier 1's brick-and-mortar expansion plans will add 50 outlets to its store count (through about 80 openings and 30 closures). Pier 1 aims to launch Pier 1 To- You, a fully functional e-commerce site -- where shoppers can pay for merchandise online and have it delivered -- in summer 2012. (The company has set of goal of online sales contributing at least 10% of total revenues by 2017.) Merchandising played a key role in the company's return to profitability and will continue to do so. The stores have been emphasizing a less cluttered look with more contemporary pieces; the firm has cleaned house of exotic furniture and funky tchotchkes. The merchandising shift sets Pier 1 apart from big-box competitors -- including discounters Target and Wal-Mart -- moving in on its market for trendy, inexpensive merchandise.
Greek Investments, Inc. owns about 11% of Pier 1 Imports' common stock.
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