Pier 1 seeks new strategies to compete
January 19, 2004-- Home Textiles Today,
A new in-store catalog, six distinct product introductions and broadened price points are several initiatives Pier 1 Imports has on its plate this year, as it wants to extend its customer base as well as increase components such as sales per square foot, customer conversion and average ticket.
Its sales per square foot is "one of the lowest in the industry," at south of $200, said Marvin Girouard, chairman and ceo. Though it does not directly compete with Neiman Marcus stores, he had heard that the luxury retailer does $500 per square foot — "there's a lot of opportunity" there.
"Retail is a different environment now," he said to investors at SG Cowen's second annual Consumer Conference, and though it may have been "smug" about frequent newspaper advertising before, this year will be different and it will run a sale about every three weeks.
"You need to compete," he said. "You have to give the customer a reason to come in."
A Special Finds in-store catalog, now being tested in 300 stores, showcases about 100 items, such as larger furniture, rugs and upholstery, and is expected to add $25 million to $30 million in sales. "It will go full tilt in October," Girouard said after the presentation.
Regarding products in the stores, Pier 1 said it will broaden the price point spread to allow for entry-level prices as well as higher end price points. Collections will now be introduced six times a year — for spring, Easter, summer, back-to-college, harvest and holiday — up from the previous four.
With an average household income of $72,000, it also thinks it can attract the decorator market, which he said had "big" interest in the retailer, helped by the fact that merchandise is in stock and doesn't have to be special ordered. Its advertising campaign from its newest spokesperson, interior designer Thom Filicia, co-star of the popular Queer Eye for the Straight Guy, will launch in March.
It also wants to drive sales to its web site, and increase its presence. Its large store format, of about 15,000 to 20,000 square feet, now comprises two percent of the chain, generating $4 million each. "They're incredibly successful," he said. "But we're not sure how many we'll have of them. Maybe 30 to 40."
The bulk of the base — at 84 percent — is the typical 10,000 to 12,000 square foot format, which bring in $1.8 million per store. The smaller store of 8,000 to 10,000 square feet, for areas where the population is 20,000 to 40,000, is 14 percent of the chain, with $1.1 million in sales each.
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