Pier 1 Imports Inc. (PIR) is the latest in a growing list of retailers planning to close stores in order to survive a downturn in business.
The Fort Worth, Texas-based home decor and furniture retailer said it plans to close up to 25 stores in the next couple years to cut costs. Macy’s Inc. (M), J.C. Penney Co. Inc. (JCP), Gap Inc. (GPS) and Staples Inc. (SPLS) have also said recently that they will shutter stores to improve their outlook. (See also: J.C. Penney Recover Hits the Store-Closing Phase.)
But even as Pier 1 has been struggling with sales, it has already managed to pare down costs by roughly $5 million year over year, although that savings was partially offset by a $1 million in increase in marketing expenditures, including on television commercials. Pier 1 said it is also revamping its inventory to improve its product offerings.
“We’re dedicating greater resources to strategic categories, where we see the potential to drive sales at a higher growth rate than other merchandise areas,” said CFO Jeffrey Boyer in a call with analysts. “We’re also focusing on our top-selling collections, which allow us to realize efficiencies in marketing and inventory management and capitalize on expansion opportunities. We’re continuing to emphasize newness across all categories.”
In other changes, Pier 1 recently landed a new CEO, Alasdair James, a former Kmart CEO and former Sears president and chief member officer. James starts May 1. Costs related to the CEO changeover also offset some of the $5 million in savings Pier 1 had secured.
Despite decided strides toward cutting costs and improving products, Pier 1 Imports stock was down 10 percent in Thursday’s session on its disappointing fourth quarter results. Same-store sales fell 0.2 percent, net sales fell 2.6 percent, and e-commerce sales rose 28 percent.