Pier 1 seeks yet another turnaround strategy
Pier 1 Imports said last week that its CEO, Alasdair James, had stepped down and that Credit Suisse has been retained to explore financial alternatives.
Formerly president of Kmart, Mr. James led Pier 1 since May 2017. In May 2018, a three-year turnaround strategy, “New Day,” was launched that called for steep losses in 2019 followed by sales growth and profitability over the next two years.
The plan was informed by research that found shoppers felt Pier 1 competed with At Home, Cost Plus World Market, and TJX’s HomeGoods and Home Sense chains, as well as Target. Previously, Williams-Sonoma, Pottery Barn and Crate & Barrel were seen as primary competitors.
The “New Day” plan shifted to a good/better/best pricing structure with some opening price points lowered to better compete. The program also included a wider breadth of merchandise; and a new “This is Me” slogan to emphasize how the chain appeals to customers’ individuality, a focus on fresher assortments, reducing in-store clutter and positioning store associates as design guides.
On its third-quarter conference call, Cheryl Bachelder, interim CEO, said New Day “did not deliver the desired results fast enough.” Comps dropped 10.5 percent in the quarter.
She added that while the overall home furnishings and furniture sector is “performing well,” Pier 1 found “mixed success” with moves to lower prices to reframe its value proposition.
Ms. Bachelder, the former CEO of Popeyes, said the initial focus for the retailer would be implementing a “rigorous cost reduction program” and narrowing the chain’s focus “to provide the distinctive Pier 1 style and value proposition desired by customers.”
The tighter focus will be guided by Donna Colaco, the former president of Chico’s FAS’ White House Black Market business, who was appointed chief customer officer in December.
Said Ms. Bachelder, “I think, we may have confused our customer a bit by the number of items and value opportunities we put in front of them, so I think getting really crystal clear on the items and the focus, that’s going to drive our top line.”
- Pier 1 Imports, Inc. Appoints Cheryl A. Bachelder Interim Chief Executive Officer – Pier 1 Imports
- Pier 1 Imports, Inc. Reports Third Quarter Fiscal 2019 Financial Results – Pier 1 Imports
- Pier 1 Imports Inc. (PIR) on Q3 2019 Results (Earnings Call Transcript) – Seeking Alpha
- Pier 1 Imports Announces Three-Year Strategic Plan at its Analyst Day – Pier 1 Imports
- Pier 1 taking aim at HomeGoods, Target shoppers – Furniture Today
- Pier 1 rolling out $45M in strategic initiatives – Furniture Today
- Pier 1 plans revamp to up Millennial appeal –- Bizwomen
DISCUSSION QUESTIONS: What retailers do you think are Pier 1 Imports’ primary competitors? What do you think Pier 1 needs to do to reposition itself in light of consumer shopping trends and competition within the home furnishings market?