Declining National Sales May Lead to 45 Pier 1 Import Stores Closing

The fate of Pier 1 Imports in the Fairplain Plaza is yet to be determined in the wake of corporate revelations last week that as many as 45 more stores will be closed over the course of the next year. One unidentified vendor source this week said that the local store is on the list, despite the fact that corporate officials say no such list even exists as yet.

I reached out to both local store management and corporate sources this morning to determine the fate of the popular store. Jennifer Engstrand Reeder, spokesperson for Pier 1 at corporate headquarters in Fort Worth, Texas, told me this: “We are committed to having a substantial store presence as a cornerstone of our go-forward strategy and will continue to optimize our footprint to align with the needs of the business. At this time, it’s premature to estimate a total number of store closings or identify specific stores as decisions have yet to be made.”

When Pier 1 Imports corporate officials shared fourth-quarter sales results at mid-month, the retailer cited a double digit drop in sales when compared to the same period a year earlier. The bottom line was off by 13.7-percent, lower than in the same quarter of 2018 in comparable store sales figures. Net sales decreased by 19.5-percent to $412.5 million as compared to Q4 2018.

They already had closed 30 locations last year as leases came up for renewal but were allowed to expire. According to Bisnow National, about 15 to 20-percent of the company’s leases come up for renewal each year. They attribute that information to Pier 1 interim CEO Cheryl Bachelder as revealed during an earning’s call.

She also told analysts, “We are pleased to be sharing our fiscal 2020 action plan, which is designed to reset our operating model and rebuild our business for the future.” She noted, “As anticipated, our fourth quarter sales and profitability were disappointing and reflect the execution issues we identified earlier in the year and have been working with urgency to correct.”

When reviewing quarterly results, company officials said, “After closing 30 stores in fiscal 2019, the company is considering closing up to 45 locations in fiscal 2020 as leases expire. Further, Pier 1 has conducted a review of its store portfolio and will be seeking occupancy cost reductions. The store closure numbers could increase to up to 15-percent of stores if the company is unable to achieve performance goals, sales targets, and reductions in occupancy and other costs.” There are currently 1,000 Pier 1 Import stores still open and operating across the nation, so if metrics are not achieved, the closure rate could soar to 145 or more stores.

Bachelder says the company does have turnaround plans “in the works,” noting, “We’ve developed an action plan designed to drive improvement and capture efficiencies in five areas: revenue & margins, marketing & promotional effectiveness, sourcing & supply chain, cost-cutting and store optimization.” Word is that the turnaround also entails a merchandising shift as Bachelder says, “We are adding back a substantial amount of furnishings to our assortments in the second half,” adding, “Similarly, we’re also bolstering our housewares category, a growing and profitable part of the business that received less emphasis last year.”

For the moment, it’s simply wait and see for the local version of the retailer located just off the corner of M-139 and Napier alongside Dunham’s Sports in the Fairplain Plaza Shopping Center. Stay tuned.

The retail trades continue to face a barrage of closures across the country. CNN recently quoted Coresight Research as reporting national retailers have already announced some 5,994 store closings in 2019, which already exceeds last year’s total of 5,864 announced closures.

Even the retail behemoth that is Walmart disclosed plans on April 10th to shutter a dozen stores across America. None of them are in Michigan, but this is the list shared by the company according to the publication Business Insider: