Pier 1 Imports closing nearly half of stores as sales falter
FORT WORTH, Texas (AP) — Pier 1 Imports is closing nearly half its 942 stores as it struggles to draw consumers and compete online.
The home decor company said Monday it is closing up to 450 stores and will also shutter distribution centers. It didn’t say where the store closures would occur, but it operates stores in the U.S. and Canada. Pier 1 also plans layoffs at its corporate headquarters in Fort Worth.
The company didn’t say how many workers will be impacted.
The moves had some investors wondering if a bankruptcy filing was imminent. Also Monday, Pier 1 added two members to its board with expertise in corporate restructuring. The company also said it is utilizing the services of a third-party liquidator to help manage the store closings.
Pier 1’s shares fell 17% to close at $5.18 Monday. They fell another 6% in extended trading following the announcement of the store closures.
Pier 1 named a new CEO with a background in corporate turnarounds in November. Robert Riesbeck previously served as the company’s chief financial officer.
“Although decisions that impact our associates are never easy, reducing the number of our brick-and-mortar locations is a necessary business decision,” Riesbeck said Monday in a statement.
Pier 1 said sales in its most recent quarter fell 13% to $358 million as store traffic fell. It reported a net loss of $59 million for the quarter, which ended Nov. 30.
The company — which was founded in California in 1962 — has been trying to revamp its cluttered stores and change its offerings to appeal more to younger customers. But it is struggling to compete with budget-friendly home decor sites like Wayfair.Pier 1 Imports Inc. (PIR) on Monday reported a loss of $59 million in its fiscal third quarter.
On a per-share basis, the company said it had a loss of $14.15. Losses, adjusted for asset impairment costs, came to $10.77 per share.
The home decor company posted revenue of $358.4 million in the period.
Net sales for the third quarter of fiscal 2020 decreased 13.3% to $358.4 million, compared to $413.2 million for the third quarter of fiscal 2019. Company comparable sales decreased 11.4% compared to the year ago period, primarily as a result of lower traffic. In addition, the company estimates that the shift of certain holiday selling days, which were included in last year’s fiscal third quarter, negatively impacted third quarter fiscal 2020 company comparable sales by approximately 650 basis points. The impact of this timing shift is expected to reverse in the fourth quarter of fiscal 2020. Pier 1 operated 942 stores at the end of the third quarter, a decrease of 45 from the third quarter of fiscal 2019.
Pier 1 shares have fallen 19% since the beginning of the year. In the final minutes of trading on Monday, shares hit $5.18, a decrease of 40% in the last 12 months.