Pier 1 expands CargoKids - Home Goods & Housewares - new stores - Brief Article

DSN Retailing Today, July 21, 2003

Pier 1 has big expansion plans for CargoKids, opening two stores in Orlando on the way to doubling the store count this year and as many as 300 units in seven to 10 years.

Thus far, Cargo Kids has demonstrated potential. In the first quarter, for example, the format's comparable-store sales grew by 5.3% when company comps were off by 3.6%. Average transaction is about $149. CargoKids also has its own credit card, and sales on that have reached about 22% of the total and approaching a 25% goal set for the year. Purchases on the proprietary credit card averaged $436, which were "indicative of strong furniture sales," said Marvin Girouard, chairman and ceo, in a recent conference call.

Plans call for adding 20 to 25 CargoKids stores by the end of this year on the base of 25 Pier is operated at last fiscal year's end. "In addition to the two new stores in Florida, we have 11 stores in Texas, five in Virginia, five in North Carolina, five in Georgia, one in Maryland and one in Kansas for a total of 30 retail stores currently," Girouard said.

Pier 1 particularly is interested in pushing its furniture/accessories assortment to a 70-30 ratio. It's almost there, but Pier 1 is looking beyond that to building accessories to perhaps 35% of sales or more. With more accessories, Girouard said, "we'll see the mix be more accommodating to holidays."

Efforts to bring in goods that will allow CargoKids to capitalize on holidays and other promotional occasions will help Pier 1 build the business.

"We continue to test new merchandising, selections, assortments, visual displays and the overall merchandise mix," said Girouard. "The strategy is to improve and refinance the concept while continuing to define our market segment."