The company's net sales also declined, by 6.1%, from $432 million to $405.7 million. Additionally, last year's Q1 net income was $11.7 million compared to a $12 million loss this year.
"We know that it will take time to win back customers and regain market share," said Marvin Girouard, the company's chairman and CEO. One of the reasons for suffering sales is the decision by consumers to spend money on things other than home furnishings, such as travel, eating out, clothing and entertainment, he said.
Executives have also acknowledged that Pier 1 has faced increasing competition from general merchandise retailers such as Target. "What we got to do is show [the customer] differentiation," from those competitors, Girouard stressed. While consumers may flock to Target to buy items at lower prices, Pier 1 sells higher-quality wares, he insisted.
Pier 1 executives said they are fighting competition and other the other factors that have hampered sales with a new advertising campaign that started in March. The company will also conduct focus groups with consumers over the next few months, and 70% to 80% of the SKUs in stores will be changed in the next six months.
The company is slowing down its store openings this year, forecasting 55 new units, as opposed to the 60 that were planned. Pier 1, which currently operates about 1,200 units in North America, usually opens 70 to 80 stores a year. The retailer's executives still plan to have a total 1,400 to 1,500 units in the US.
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