Pier 1 Imports Loss $56.3 Million

June 20, 2007  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on June 2007 Pier 1 Imports, Fort Worth, Texas, reported a net loss from continuing operations of $56.3 million in its first quarter after losing $23.2 million in the same period last year. It was the company’s ninth money-losing quarter in a row as total sales declined 5.2 percent to $356.3 million. Same-store sales dipped 5.4 percent.

In a conference call, CEO Alex Smith said the company will eliminate its catalog and Internet operations. It will also shutter its Pier 1 Kids and outlets to focus on Pier 1. According to the company’s Web sites, it operates more than 30 Pier 1 Kids locations in the United States and 23 outlet stores. Its Web site, Pier1.com, will shift to a purely informational role. In addition, Smith plans to slash marketing costs by $50 million by halting TV advertising in favor of direct mail.

According to published reports that cite regulatory filings, Pier 1 has raised the number of stores it plans to close from 60 to 100.

In a one-page announcement issued in advance of the company’s conference call, officials said first-quarter margins were hurt by the company’s aggressive liquidation of modern craftsman merchandise. The company reduced selling, general and administrative expensive by $15.5 million from a year ago, including a $9 million reduction in marketing expenses.

“Earlier this year, we outlined six key business priorities aimed at returning Pier 1 Imports to profitability and beyond,” Smith said. “As planned, our results in the first quarter reflect the impact of changes that are a direct result of the speed with which we are executing our strategy.”