Pier 1 CEO Alex Smith says he’ll retire at year’s end
September 9, 2016 10:46 AM
(Bloomberg)—Pier 1 Imports Inc. shares fell the most in nearly nine months after the home-furnishings retailer said its second-quarter loss would be wider than expected and CEO Alex Smith announced plans to retire at the end of the year.
Recruiting firm Korn Ferry is helping search for a replacement for Smith, who has been CEO since February 2007, the Fort Worth, Texas-based company said in a statement after the close of regular trading Wednesday. Pier 1 is No. 124 in the Internet Retailer 2016 Top 500 Guide.
Pier 1 has struggled to keep sales growing without resorting to deep discounts that hurt its profitability. Smith said the company has employed a “balanced promotional strategy” that helped it increase margins. Still, “ongoing store traffic challenges” took a toll on sales and earnings last quarter, he said.
Through the quarter ended Aug. 31, comparable-store sales fell 4.3%, the company said Wednesday in a preliminary earnings statement. Pier 1 is scheduled to report full fiscal second-quarter results on Sept. 28. Pier 1 shares were down 5.7% this year through the close on Wednesday.
In the past year to 18 months, Pier 1 has implemented new capabilities to better connect its e-commerce site and stores, including buy online, pick up in store service and ordering in store from web inventory. E-commerce accounted for 16% of revenue in fiscal 2016, which ended Feb. 27. Based on total revenue of $1.8922 billion in fiscal 2016, an increase of 0.4% from $1.8846 billion the prior year, Internet Retailer calculates Pier 1’s online sales grew 46% to nearly $303 million from just over $207 million in fiscal 2015.
Pier 1, which resumed selling online in 2012 after a five-year hiatus, won the Comeback of the Year award in 2015 at the inaugural Internet Retailer Excellence Awards event at IRCE.