The chain will open just five new Pier 1 stores this year, while closing approximately 60 locations as part of a turnaround program that also will include cutbacks at corporate headquarters and marketing expenditures, as well as merchandising changes.
"We will continue regular reviews of our stores on a store-by-store and market-by-market basis," said new president and CEO Alex W. Smith. "When it makes good business sense, we will close locations through natural expiration, economic termination and subleasing."
In fiscal 2007, the company opened 34 stores and closed 64 units, ending the year with 1,196 stores in the US and Canada.
In addition, the company is cutting staff and costs at its corporate headquarters, plans to cut marketing expenditures, and has discounted most of the contemporary merchandise in its stores to "return to its roots," Smith said.
"We're not going back in a historic way," Smith said. "We're talking about merchandise that historically have appealed to Pier 1's customers."
The moves will be part of an overall plan to reverse Pier 1's fortunes, which declined precipitously last year, as the company tried new merchandise lines and alienated its core customer, Smith said.
"Fiscal 2007 was a truly horrible year for Pier 1," Smith said. "Pier 1 has been bleeding not because of the economy or competition, but from self-inflicted wounds."
In the fourth quarter, Pier 1 posted sales of $473.7 million, down 6.4% from the comparable period a year ago. Comparable-store sales declined 11%. The company reported a net loss from continuing operations of $58.7 million, which included $45.8 million in unusual and other one-time charges.
For fiscal 2007, total sales were $1.6 billion down 8.6% from fiscal 2006. Comparable store sales declined 11.3%. The company posted a net loss from continuing operations of $227.2 million.
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