Pier 1 Imports Inc. is getting out of the e-commerce business.
The retailer, No. 298 in the Internet Retailer Top 500 Guide, will shut down its e-commerce business and catalog operation by Aug. 31, but keep Pier1.com alive as a marketing site.
We are exiting all non-Pier 1 stores activities, Pier 1 president and CEO Alex W. Smith told Wall Street analysts on the company’s first-quarter conference call. We are exiting the e-commerce and catalog business.
In fiscal 2007 Pier 1 grew its direct sales, which mainly come from the web, to $18.9 million from $15.3 million in the prior year. But overall the retailer has been struggling to cut costs and return to profitability. For FY 2007, Pier 1 reported a net loss of $227.6 million on total sales of $1.62 billion vs. a net loss of $39.8 million on sales of $1.77 billion in fiscal 2006. In Q1 of fiscal 2008 Pier 1 posted a net loss of $56.3 million on revenue of $356.3 million, compared with a net loss of $23.1 million on revenue of $376 million.
In March Pier 1 announced a turnaround plan to cut costs. In addition to closing its direct marketing operation, Pier 1 also is shuttering about 100 stores, including its Pier 1 children’s and clearance stores. Going forward we will focus on what matters: our Pier 1 Imports stores, says Smith.
In recent years Pier 1 had been working to grow its e-commerce operation. In fiscal 2007, Pier 1’s e-commerce site received an average of 5.7 million visits per month, the company says. Pier 1 also recently implemented new online features that allow customers to use discount and coupon codes at checkout and redeem Pier 1 gift cards.
By exiting e-commerce and direct marketing, closing stores and initiating other cost-savings measures, Pier 1 expects to eventually reduce operating costs by around $150 million, says Smith.
Pier 1 is the second major chain retailer to exit e-commerce in recent years. TJX Companies Inc. discontinued retail sales at its sole e-commerce site for its T. J. Maxx and HomeGoods brands in October 2005.