To profitability and beyond at Pier 1 Imports
After being left for dead four years ago, Pier 1 Imports has recuperated fully to the point where it recently embarked on a new three-year plan to restore growth to the company.
Key elements of the plan call for the acceleration of e-commerce, improvements to existing stores, new store expansion and investments in infrastructure to support the enterprise and improve efficiency.
“We have numerous opportunities to profitably increase the reach of the Pier 1 Imports brand,” said president and CEO Alex Smith. “With an outstanding management team, the strength of our brand and our rigorous capital discipline, we are focused on developing our company into a best-in-class multi-channel retailer.”
That means getting serious about online, an area where the company has been a laggard. It was only last fall that Pier 1 launched in-store merchandise availability on its site and now the next phase calls for the launch this spring of a site-to-store type service called Pier 1.2Go that allows for orders place online to be picked up in stores. That will be followed in mid-2012 by the Pier 1.2You service, which allows customers to have merchandise shipped to their home.
With regard to stores, the emphasis will be on improvement to existing units as opposed to dramatic square-footage expansion. The company plans to pursue a range of store improvement initiatives over the course of the next three years that will affect 90% of its 1,046 stores. Meanwhile, over the course of the next five years, the company expects it store base will increase to 1,100 units as it opens approximately 80 new stores and closes 30 others.
The unveiling of the three-year plan follows the release of fourth-quarter and full-year results that saw the company return to annual operating profitability for the first time in six years.
CEO Smith characterized the results as exceptional, with fourth quarter comps up 8.9% and up 10.9% for the full fiscal year ended Feb. 26. Total sales increased 7.7% during the fourth quarter to $426.6 million and full-year sales increased 8.2% to nearly $1.4 billion. The top line growth translated into profits as well with fourth quarter net income up 65% to $57 million and earnings per share up 60% to 48 cents. Net income for the full year was $100 million compared to net income the prior year of $86.8 million.
The momentum has continued into 2011.
“Our new year is off to a good start and our spring and Easter assortments are resonating with our customers. Although the Easter holiday falls into April this year, March comp store sales increased 11.3% on top of last year’s March comp store sales increase of 19.4%,” Smith said.