Pier 1 loses $56.4 million in quarter
To close are all 33 Pier 1 Kids stores
Clint Engel -- Furniture Today, June 21, 2007
FORT WORTH, Texas — Pier 1 Imports said it lost $56.4 million in its fiscal first quarter, more than double the loss for the same period a year ago, and said it will close 40 more stores than announced earlier as part of a restructuring.
Among the stores to close are all 33 Pier 1 Kids stores, which will shut down by Oct. 31, and all 24 clearance centers, which will close by July 31. In addition, the company will exit its e-commerce and catalog businesses, although it will retain the pier1.com Web site for marketing purposes.
The net loss for the period ended June 2 compares with a $23.2 million net loss for the first quarter a year ago. Sales were down 5.2% to $356.4 million and same-store sales dipped 5.4%.
Officials at the Top 100 company, which has more than 1,000 stores, said it now plans on closing about 100 stores this year rather than the 60 announced earlier.
“We need to focus 100% of our attention on our core business, the Pier 1 Imports stores,” said Alex Smith, who joined the company as president and CEO in February.
It expects the business exits will incur expenses of about $10 million beginning in the fiscal second quarter.
In the first quarter, the retailer said its merchandise margins declined to 45.5%, compared with 53.8% last year, a result of aggressive liquidation of its modern craftsman merchandise, the company said. Excluding the markdowns, Pier 1 said its merchandise margins would have been 52.2%.
Pier 1 cut selling, general and administrative expenses by $15.5 million over the same period a year earlier, primarily from trimming $9 million in marketing expenses, $6 million in store payroll and $4 million in other general administrative costs. The savings were offset set by a one-time charge of $3.5 million relate to severance and outplacement costs.
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Pier 1 loses $56.4 million
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