Pier 1 Talks of Plans for Turnaround
Clint Engel -- Furniture Today, January 17, 2005
Pier 1 Imports sees more, larger stores with less clutter — along with targeted advertising — as keys to improving the company's sales performance.
Cary Turner, executive vice president and chief financial officer of Pier 1 Imports, said, “We know what it's going to take to turn this ship around,” during a presentation at the SG Cowen Consumer Conference last week.
Turner said the company is in the midst of a sku-rationalization project that will see distinct offerings reduced from about 4,500 to 3,500. “We feel the stores will look better with less,” he said. The final goal, he said, is a sku reduction in the 5 to 7 percent range.
While reducing the number of items, Pier 1 wants to increase its number of stores, hoping to have 1,500 in the United States and Canada. The company ended the third quarter with 1,137 stores in North America. Basic stores average 10,000 and 12,000 square feet, while large stores range from 15,000 to 20,000 square feet.
In terms of location, the company “loves suburbia,” Turner said. “We don't love Manhattan. It's very difficult to run a store in Manhattan.”
One a positive note, Turner said Pier 1 was excited about customers that use its credit card, noting that they make up 27 percent of all sales. “And we think that could go to 30 percent,” he said.
The company also continues to transition its acquired CargoKids! Locations to the Pier 1 Kids nameplate to with good results, Turner said.
Holiday numbers, he said, were hurt by inventory that was “a bit too lean.” Also, Turner said, average ticket was down 5 percent as furniture sales dipped. Though he described 2004 as “disappointing,” Turner said he was optimistic for 2005, predicting comp growth between 2 and 4 percent.
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