Pier 1 loses $56.4 million in quarter
Plans to close 100 stores this year
Clint Engel -- Home Accents Today, 6/25/2007 7:34:00 AM
Pier 1 Imports said it lost $56.4 million in its fiscal first quarter, more than double the loss for the same period a year ago, and said it will close 40 more stores than announced earlier as part of a restructuring.
The net loss for the period ended June 2 compares to a $23.2 million net loss for the first quarter a year ago. Sales were down 5.2% to $356.4 million and same stores sales dipped 5.4%.
In a filing with the Securities and Exchange Commission, the Top 100 company, which has more than 1,000 stores, said it now plans on closing about 100 stores this year rather than the 60 announced earlier. It’s also terminating more employees and “exiting or redirecting certain other business activities.”
It expects the actions will incur expenses of about $10 million beginning in the fiscal second quarter.
In the first quarter, the retailer said its merchandise margins declined to 45.5%, compared with 53.8% last year, a result of aggressive liquidation of its modern craftsman merchandise, the company said. Excluding the markdowns, Pier 1 said its merchandise margins would have been 52.2%.
Pier 1 cut selling, general and administrative expenses by $15.5 million overthe same period a year earlier, primarily from trimming $9 million in marketing expenses, $6 million in store payroll and $4 million in other general administrative costs. The savings were offset set by a one-time charge of $3.5 million relate to severance and outplacement costs.
“Earlier this year, we outlined six key business priorities aimed at returning Pier 1 Imports to profitability and beyond,” Alex Smith, the retailer’s new president and CEO, said in a release. “As planned, our results for the first quarter reflect the impact of charges that are a direct result of the speed with which we are executing our strategy." -- Furniture Today
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