Pier 1 store schedule defies downward trend - Brief Article

DSN Retailing Today, July 23, 2001 by Debbie Howell

FT. WORTH, TEXAS -- The economic slowdown hasn't caused any jitters for Pier 1 Imports, which is forging ahead with an aggressive store opening program, a new marketing campaign and a second concept in the wake of its most profitable year in history.

Ceo Marvin Girouard told shareholders at the retailer's annual meeting June 28 in Ft. Worth that the outlook remains positive for value-oriented casual home furnishings. He even predicted a rebound in consumer spending by yearend. "Pier 1 has not changed its course despite the current volatile and uncertain retail environment," Girouard said. "In fact, all of the consumer pessimism currently. surrounding retailers could be forgotten and quickly turn positive."

The market for home furnishings in particular is strong, Girouard said, given that home ownership rates are the highest level in history--approaching 68%. Baby Boomers will be a driving force in this market for several years, along with the Echo. Boomers, another large population group that is now entering the stage of buying their first homes.

Even with more than 820 stores now in the United States, the company sees plenty of room for expansion. Pier 1 projects the. North American market can support up to 1,300 stores. This year, Pier 1 will open 85 stores in new and existing markets, an increase from the 65 added last year. Beyond its core U.S. market, Pier 1 also has stores in Canada, Mexico, Puerto Rico, the United Kingdom and Japan.

Another growth opportunity arose with the retailer's acquisition in February of Cargo Furniture, a 21-store children's furniture chain. Pier 1 is taking its time refining the concept and plans to develop it into a 200- to 300-store national chain distinct from Pier 1.

Last year had other significant milestones as well, the company, Girouard said, completed its first full year under a new value-oriented merchandising strategy and finished a store-remodeling program begun in 1994. The retailer kicked off a new marketing campaign, "Get in touch with your senses," that features actress Kirstie Alley, and also launched its first e-commerce site.

Looking back, the ceo pointed out several smart moves Pier 1 made during the past two decades that led to its success today, including increasing furniture sales to 40% of revenue, moving out of malls into stand-alone stores or strip centers and creating a national television advertising campaign to drive customer traffic.

He said the chain has evolved from cluttered stores selling unique imported items and rattan furniture to a retailer that now offers a wide array of casual and stylish home furnishings presented in a visually inspiring format.

Proof the retailer is heading in the right direction came in the form of healthy sales and profits for the fiscal year ended March 4, 2001. Sales rose 14.7% to $1.4 billion, with same store sales increasing 7.8%. Profits shot up 29% to $94.7 million.

"I am very proud of our accomplishments this past year because it was the most profitable in our company's history," Girouard said. "Although this year we are now facing a different and difficult economic environment that is challenging virtually the entire retail sector, I still firmly believe our company has never been stronger."