Pier One Imports Sees Bright Future With New E-commerce Site
Published: Sunday, November 11, 2012
Updated: Tuesday, November 20, 2012 17:11
Pier One Imports Inc. finally made the move into the 21st century with the launch of its new e-commerce site in late August.
In Pier One’s attempt to become a multi-channel retailer, the company’s new website, pier1.com, provides customers with online ordering and shipping – a feature that was not previously available.
Since the launch, the company says that the redesigned website is doing well; although it is still in the early stages and too soon to really tell.
During the company’s second quarter earnings call last month Alex Smith, president and chief executive officer of Pier One, said the website “may be the single most important project in the history of our company and certainly the largest and most complex.”
In the age of Amazon.com, companies in the specialty retail industry are in dire need to stay ahead of the curve when it comes to online shopping.
While Pier One is a little behind in the game, it appears that it is taking a step in the right direction with the new website.
Pier One operates as a specialty retailer of imported home furnishings and décor in North America.
Founded in 1962 by Bob Sanders, the first Pier One store was located in San Mateo, California. According to the company’s website, Pier One catered to the post-World War II generation seeking “beanbag chairs, love beads and incense.” Since 1966 the company’s corporate headquarters has been located in Fort Worth, Texas.
Today, Pier One’s merchandise consists of decorative accessories, furniture, housewares and seasonal items at reasonable prices, and is imported from more than 50 countries.
The publicly traded company is listed on the New York Stock Exchange under the symbol PIR.
Competitors include Bed Bath & Beyond, Inc. (BBBY); Kirkland’s Inc. (KIRK); Haverty Furniture Companies, Inc. (HVT); Cost Plus, Inc. (CPWM); and Williams-Sonoma, Inc. (WSM).
Pier One reported net income of $26.2 million in the second quarter of fiscal 2013 ended August 31, a 57.8 percent improvement compared to net income of $16.6 million for the same period last year.
Two factors caused the jump in net income. One is that total sales increased by 8.3 percent to $367.6 million, as opposed to $339.6 million in the year-ago quarter. The second factor is that costs also went down as a percent of sales. Costs of sales decreased by 1.6 percentage points, and selling, general and administrative expenses (SG&A) dropped by 0.6 percentage points. In other words, Pier One has become more efficient.
Also,same-store sales, a key measure of retail performance, increased 6.7 percent during the second quarter, a slower pace than the 10.8 percent gain in the second quarter of last year. Same-store sales refer to the difference in revenue generated by the retail chain’s existing outlets over the period, compared to the same period last year. The rate of same-store sales growth is slowing for Pier One.
Second quarter gross profit improved 12.7 percent to $151.5 million compared to $134.5 million a year ago.
The strong sales results for the quarter were mainly caused by increases in store traffic and a higher average amount of money each customer spent in the store.
The company announced its new three-year growth plan in April 2012, which includes improving the company's store portfolio through refurbishments, remodels, new store openings and strategic relocations.
During the period, Pier One closed one store and opened five new stores, bringing the total count to 1,058 stores in the United States, Canada, Mexico and Puerto Rico. It plans to open about 20 to 25 new stores this fiscal year.
The company is likely to fare better as the housing market picks up. More people buying homes means more homes that need furnishing and decorating, and therefore more customers turning to Pier One.
Baylor graduate Amy Sowan recently moved to Dallas and turned to Pier One in search of odds and ends for her new apartment.
“I don’t usually shop at Pier One but I went into the store on a whim and found a mirrored nightstand,” Sowan said. “They have some cute things sometimes, and the price points are pretty typical, but it isn’t a store I normally shop at.”
With the continuing popularity of online shopping, Pier One hopes that its online push will help bring in more customers and keep the company up to speed with competitors.
When contacted, Pier One’s media relations specialist and store employees said they could not comment about the company.