When Pier 1 Imports first set out to develop its omnichannel business, it developed a "crawl, walk, run" approach. The retailer anticipated that the transformation would take it from a highly profitable retail store format to an equally compelling omnichannel business known as 1 Pier 1. However, things are progressing better and more quickly than expected. E-commerce has accelerated rapidly — growing from its launch in July 2012 to 4 percent of sales last year to nearly 10 percent of sales through the first half of this year.
As retailers gear up for the holiday selling season, industry watchers ask the same inevitable questions. How promotional will they get? Will discounts make a difference to their sales? And at what cost to profit? They should listen closely to Pier 1 Imports CEO Alex Smith's sobering remarks. The home furnishings retailer's stock slumped as much as 18 percent in its biggest daily percentage drop in almost five years on Thursday after its second-quarter profit and sales missed Wall Street expectations. While profit was partly hurt by increased online spending, increased storewide promotions were the big culprit that hurt margins.
Pier 1 Imports announced it will soft launch its e-commerce operation July 28 with a new website on a new platform. The e-commerce business will initially feature the same merchandise assortment as its brick-and-mortar locations, then add unique merchandise categories not carried in its stores, said Alex Smith, president and CEO, Pier 1 Imports, during a quarterly conference call. The company will begin actively promoting its e-commerce operation in the fall, Smith added.
FORT WORTH, Texas — Pier 1 Imports reported that sales for its first quarter ended May 26 increased 7.9% to $361 million from $335 million in the year-ago quarter. Comparable-store sales for the quarter were up 7.2%. For the first quarter, the company is expecting earnings per share are expected to be approximately 16 cents versus last year’s first quarter earnings of 12 cents per share. Alex Smith, president and CEO, commented, “We are pleased to report another quarter of profitable sales growth. Great in-store execution and strong Easter, spring, Mother’s Day and Memorial Day assortments have resonated