Pier 1 to close 100 stores over three years

[dmx10101]

Pier 1 to close 100 stores over three years
April 9, 2015 | By Dan Berthiaume

Pier 1 Imports Inc. suffered a big decline in profit in the fourth quarter and announced that it plans to close 100 stores as part of a three-year plan to "reduce occupancy costs."

Pier 1 reported net income of $33.1 million in the fourth quarter of fiscal 2015, down 22% from $42.6 million the same quarter a year earlier.  Expenses related to the retirement of the company’s former CFO, as well as increased selling, general and administrative (SG&A) expenses, contributed to the decrease in profit.

Total sales for the fourth quarter were $543.6 million, up 5% from $515.8 million Same-store sales increased 5.7% and reflect increases in brand traffic and average ticket, and online conversion.

Pier 1 has initiated a plan to optimize its store portfolio as part of a strategy to drive growth through its omnichannel platform, reduce occupancy and payroll costs and improve efficiency. As part of the plan, the company plans to close approximately 100 stores during the next three years, primarily through natural lease expirations and relocations, leaving it with just under 1,000 stores.

Alex W. Smith, chairman and CEO of Pier 1, said the company’s $200 million e-commerce channel it has built in the past two years will help improve profitability through improved customer engagement.

“In the short term our focus is on improving the profitability of our Pier 1 Imports brand,” said Smith. “We now have the ability to engage our customers more frequently through broader product offerings, expanded customer service options, tailored merchandising and marketing strategies and aspirational brand positioning.”

For the full fiscal year 2015, Pier 1 reported net income of $75.2 million, down 30% from $107.5 million the prior year. Total sales increased 5% to $1.87 billion from $1.77 billion. Same-store sales increased 4.7%

During the first quarter of fiscal 2016, Pier 1 expects same-store sales growth, including e-commerce, of about 4%. For the full fiscal year 2016, Pier 1 expects same-store sales growth, including e-commerce, in the mid-single-digits. Looking ahead to fiscal 2017, Pier 1 expects to achieve measured top line growth, inclusive of store closures, and grow e-commerce sales penetration to approximately 20%.