It looks like the dismal future of retail has no end in sight as yet another big retailer has announced looming store closures.
This week you can add Pier 1 Imports to this list, as the company has disclosed that an unimpressive earnings report of larger-than-expected losses in the fourth quarter will definitely result in the shuttering of some stores. This could lead to the closure of nearly 50 stores, with several dozen more potentially at risk. In all, US retailers have announced nearly 5,994 stores will be closing this year. Last year, there were 5,864 announced store closures.
According to the company, Pier 1 could close upwards of 15 percent of their stores if they are not able to hit their performance goals, sales targets, and occupancy reductions, as well as other costs.
Pier 1 Imports CEO Alasdair James implemented a turnaround plan last December but, unfortunately, this plan did not succeed. With that, the company, known for its candles and other decorative home accessories, had to let go of James. And after this, the retailer—which has been struggling to compete against the growing strength of online stores—launched a new “action plan” with the goal of saving upwards of $110 million by the end of fiscal year 2020. This plan intends to establish a more merchandise-focused direction which, in part, would start by eliminating any inventory that is not “uniquely Pier 1 merchandise.”
With that loss of James, managing director of the global consulting firm, AlixPartners, Deborah Rieger-Paganis will eventually take over. With 30 years of experience as a leader in improving retail finance organizations, she could be just the leader Pier 1 needs to get back on top.
In a release, Rieger-Paganis comments, “I am committed to instilling financial discipline across the organization as we work to drive a successful turnaround and create value for shareholders over the long term.”
Regarding the new direction, Pier 1 interim CEO Cheryl Bachelder advises, “We are continuing to focus on opportunities and initiatives to help drive incremental benefits in the coming years, creating the runway to return our brand to long-term health and sustainable financial performance.”