Pier 1 Sales Slide, Chase Takes Credit Business

August 30, 2006  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on August 2006 Pier 1 reported sales of $114 million for the month of August, a 7.8 percent decline from the $123 million posted during the same month last year. In addition, comparable store sales declined 9.1 percent.

Sales for the second quarter were $370.7 million, down 12.5 percent from last year’s $423.7 million, and same-store sales declined 14.8 percent. Year-to-date sales of $746.8 million were down 8.3 percent from $814 million last year, and comparable store sales declined 10.9 percent. The retailer will report second quarter results Sept. 14.

“Customer traffic and sales improved during the last two weeks of August, however traffic trends remained below last year,” said Marvin Girouard, chairman and chief executive officer. “We believe the improved traffic and sales resulted from more aggressive marketing initiatives including new TV commercials. We will continue to manage the business through promotional events designed to attract new and existing customers into our stores.”

In addition to the sales figures, Pier 1 announced it has agreed to sell its private-label credit card operation with outstandings of $140 million and a million active accounts to JPMorgan Chase. The retailer expects net proceeds of $155 million from the transaction.

Pier 1 and Chase will also entered a long-term marketing and servicing agreement under which Chase will provide credit and customer service benefits to Pier 1 cardholders, and offer special financing terms to the retailer’s customers. The retailer will also receive future ongoing payments based on credit card sales, new account generation and other credit-related activities.

The transaction is expected to close in the third quarter.