Home furnishings retail chain Pier 1 Imports Inc. is closing stores as overall sales slide despite online sales growth.
Pier 1, No. 120 in the Internet Retailer 2017 Top 500 Guide, reported online sales accounted for around 20% of its overall sales in the just-concluded 2017 fiscal year, or $365.9 million, up 20.8% from $302.8 million in the 2016 fiscal year, when online accounted for around 16% of overall sales. During the fourth quarter, e-commerce accounted for 19.5% of overall sales, or $103.0 million, up 28.3% from $80.3 million during the same time the previous year, when e-commerce accounted for around 15% of overall sales.
Pier 1 plans to close up to 25 stores this year, a new trend for the retailer. In the past two years, Pier 1 has closed 47 stores, dropping to 1,018 locations, down 4.4% from 1,065.
With online sales growing, Pier 1 is focused on bolstering its e-commerce technology.
“Our plans include further investments in technology and ongoing site optimization to ensure that we’re differentiating our merchandise presentation, delivering a superior customer experience and distinguishing the Pier 1 Imports brand,” chief financial officer Jeffrey Boyer told analysts on the retailer’s earnings call, according to a transcript from Seeking Alpha. “This entails continually evolving our functionality, content and features to ensure we maintain our strong position in the online home furnishings market.”
Pier 1 last week announced it had hired Alasdair James to take over as its CEO on May 1. James comes from Kmart (parent company Sears Holdings is No. 14 in the 2016 Top 500) where he had been the retail chain’s president.
“He’s got a great background of working from some top-notch companies,” interim CEO Terry London said. “His training has been good. His sales, marketing, brand management, supply chain and omnichannel experiences and a lot of analytics that he has had experience in [helped set him apart].”
- Net sales of $528.4 million, down 2.6% from $542.3 million last year.
- A year-over-year comparable sales gain of 0.2%.
- Net income of $26.6 million, up 42.2% from $18.7 million last year.
For the 2017 fiscal year, Pier 1 reported:
- Net sales of $1.83 billion, down 3.2% from $1.89 billion last year.
- A year-over-year comparable sales decline of 1.0%.
- Net income of $30.1 million, down 24.0% from $39.6 million last year.