Pier 1 still looking for black ink, but liking textiles
September 20, 2007,
Fort Worth, Texas – The current new mix of decorative pillows, rugs, window panels and chair pads is seeing “some nice sales gains,” with entry-level price points “particularly strong” at Pier 1 Imports stores as the home furnishings retail chain pursues its turn-around effort now and through next spring.
Pier 1 reported a loss for the quarter ended Sept. 1 of $43.4 million, or 49 cents per share. That was worse than analysts’ expectations of a 44 cent per share loss, but narrowed the year-ago loss of $73.1 million, or 84 cents per share.
Sales dropped 7% to $344.6 million. Comps fell 3.6%, excluding Pier 1 Kids, clearance stores and e-commerce.
The 1,157-unit chain has been repositioning itself away from high-ticket furniture items and closer to its roots as a source of “impulse pick-up items and lower average selling prices, and more, smaller, decorative furniture items,” said Smith.
This approach, he said, speaks to the downward trend nationwide in the housing market. “This shift will reduce the impact the market-wide decrease in spending on high-ticket home products will have on our business,” he said.
The roll-out of 2,000 or so new skus into Pier 1 stores has already begun. And while it is still too early for the retailer to provide concrete results on the sales of these goods, Smith pointed out “some of the seedling of success we are seeing” in several categories in addition to the new home textiles offerings churning early positive results.
The first-time introduction of Halloween merchandise, which has been paired with harvest seasonal assortments, has already proven to be a winner. In fact, Smith said, Pier 1’s biggest percentage of sales last week stemmed from festive décor items related to this October 31st holiday.
The reintroduction of classic Pier 1 scents, including candles, has been another plus so far. Since the beginning of September, candles have been Pier 1’s top unit sales department. “This is real tangible progress,” Smith said.
Next week, Pier 1 will start delivering initial holiday offerings to stores.
By October 15 the stores will be set with the holiday décor ornaments and other related items. By November 15, “we should be pretty well set” with holiday, said Charles Turner, evp and cfo.
To support the new holiday merchandise hitting stores in the next couple of months, Pier 1 will issue four new mailers in the fourth quarter, including an expanded 40-page edition highlighting Christmas decorating and gift items.
These will go out to a subset of the retailer’s 20 million names in its database, “to both our best as well as some of our new customers,” Smith said. “These mailers have a good feel and increasingly reflect what our company is all about.”