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Report: Pier 1 Needs Closures

FORT WORTH, TX-The home décor chain, which has suffered from poor sales this year, should close 250 stores, analysts say.

By Jennifer D. Duell | Updated on December 23, 2005

FORT WORTH, TX-Pier I Imports Inc. should close 20% ofits stores to improve the chain’s profitability andstock valuation on Wall Streets, according to a groupof Wachovia Securities retail analysts. Thatpercentage translates to roughly 250 stores.

“(The expansion) to 1,197 Pier 1 stores in NorthAmerica has resulted in over-saturation of mostmarkets, which has negatively impacted sales andstore-level profitability,” says a recent reportwritten by analysts Ralph Jean, Jeff Schollaert andShawn Tesoro. “We believe that our analysis results ina cogent argument for reducing the store basesignificantly based upon the associated benefit tooperating profitability, cash flow and equityvaluation.”

The report also suggests that Pier 1 notopen any new stores during fiscal year 2007. A Pier 1 spokeswoman told GSR that the company couldnot comment on the suggestion to shutter stores.

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