Pier 1 Taking Measured Steps Back into Online Sales

— September 21, 2010

Pier 1 Imports is moving back into e-commerce step by step after exiting the channel in 2007. The home furnishings retailer’s site-to-store initiative now has its entire merchandise assortment online, but only for browsing and pre-shopping. In October, customers will be able to check in-store merchandise availability at any of the chain’s 1,000-plus Pier 1 stores, but for now they will still need to come into stores to complete their purchases.

“We are very excited with recent research findings indicating that already the number of visits to pier1.com and the length of time spent on our site equals and in some cases exceeds our competitors with full e-commerce shopping capabilities,” said Alexander Smith, Pier 1’s president and CEO. He added that Pier 1 anticipates a full e-commerce launch in 2011: “We will continue to provide updates in the future on our progression as we evolve into a full multi-channel business.”

Smith was speaking during a recent conference call reporting positive financial results for the chain. During the second quarter, which ended August 28, 2010, total sales increased 8.1% to $309.9 million, up from $286.7 million during the same period last year. Comparable store sales increased 11.2% for the quarter, compared to a decline of 7.6% last year. Net income was $14.4 million, compared to a loss of $15.8 million for the same period in 2009. The retailer has now reported net income for four consecutive quarters, and has reported operating income in its second quarter for the first time in six years.

“Merchandise margins continue to be positively impacted by significantly less clearance activity, reduced vendor and supply chain cost, and well-managed inventory levels,” said Cary Turner, executive vice president and CFO.

The retailer, which has been hit hard by the slowdown in home furnishings retailing related to continuing trouble in the housing market, will not be growing by opening new stores: it anticipates ending 2010 with 1,047 stores, one less than its current count.

However, Pier 1 is taking steps to move into non-store channels such as social media. Smith announced a social media acquisition initiative to begin on Facebook in November. For every person that becomes a new fan on its Facebook page, Pier 1 will donate $1 to Toys for Tots, up to a total of $100,000.

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