Winter blues at Pier 1
By Andrea Lillo -- Home Textiles Today, 12/22/2003 12:00:00 AM
FORTH WORTH, TX —
A steady drop in customer traffic nationwide has led to a "disappointing" season so far for Pier 1 Imports, though it is still hoping for a merry, albeit late, Christmas.
Due in part to the snowstorms that hit parts of the nation two weekends in a row, Pier 1 said it lost one-fifth of expected sales for the Dec. 6 weekend, and $2 million for the Dec. 13 weekend, more than half of that from several East Coast regions, said Marvin Girouard, chairman and ceo, during the company's third-quarter conference call.
In addition, an insert in Sunday's papers in early December did not translate into expected increased sales, not only in the snow-covered regions but elsewhere. Girouard speculated that Pier 1's customers shopped in the latter part of November instead, taking away from December sales. He also speculated sales were affected by a previous insert that emphasized furniture items more than gifts. Other retailers and industry experts may have also overestimated how well the season was going to be, he added.
Dec 14 was "probably the biggest disappointing day I've had in all of my experience, because we really thought we'd were going to see some momentum start to gain," he said. "We had a big day planned and we missed it by $2 million ... It fell apart ... Where we're really hurting is the traffic."
He added, "Our challenge is to find out if this is a macro or micro event. Is it a Pier 1 problem or is it a U.S. economy/weather/traffic problem?" He said that analysts and others have visited its stores and reports back are positive.
This season, the sellthrough of holiday merchandise is "fairly comparable" to last year's, said Girouard, not off by much. But it seems that electronics companies, ones that are "selling needs instead of wants, are doing better."
However, "we still have 50 percent of our Christmas business to go" Girouard said nine days before Christmas, and the company's customers generally shop during the last week of the season and the first week after Christmas.
"Typically, we don't panic," he said, and Pier 1 will respond by marking some items down. "But we won't put the whole store on sale like I've seen certain department stores do, because we don't think that will serve us in the long term."
The company also transitions quickly into spring, and spring merchandise replaces holiday products beginning Dec. 26. It also has other sales events planned, including a Fresh Start on January 9th and a Veterans Day sale later in that month.
It also will up the number of new product introductions to six distinct collections from the previous four bowed in spring, summer, harvest and holiday.
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