- Pier 1 Imports is in trouble.
- The company announced Monday in an earnings report that it plans to close up to 450 of its 942 stores, which could impact thousands of employees’ jobs.
- The news comes amid reports that the company plans to file for Chapter 11 bankruptcy protection and cut 40% of its headquarters staff, or close to 300 people, according to Bloomberg.
- We visited a New York City Pier 1 Imports store over the summer, and while we were impressed with the quality offerings and charming store layout, it was clear why the company has been struggling to compete with other discount home-goods chains.
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The struggles of Pier 1 Imports are only getting worse.
Amid reports of an imminent Chapter 11 bankruptcy filing, the retailer announced in its Monday earnings statement that it plans to close up to 450 of its 942 stores. The closures could impact thousands of employees’ jobs.
The company is also planning to cut 40% of its headquarters staff, or close to 300 people, according to a Bloomberg report.
The news follows a general pattern of decline for the company that had plans to close 57 stores by its 2020 fiscal year and posted eight straight quarters of sales losses.
Increased competition from stores like Walmart and Wayfair have not helped. According to critics, Pier 1 Imports has failed to meaningfully distinguish itself from its competitors. Analysts have attributed the company's steady decline to overwhelming store environments and out-of-style merchandise that doesn't find favor in the eyes of customers.
We visited a Pier 1 Imports store over the summer and saw the problem first-hand. While we were impressed with the quality offerings and charming store layout, it is clear why the company is struggling to compete with other discount home goods chains.
Here's what we saw:
We visited a Pier 1 Imports on Manhattan's Upper East Side.
A sign in the window made it clear that our experience would be focused on home-making rather than chiefly discount-finding.
Still, the store was having its semi-annual sale when we visited, so we expected to find some good deals.
The atmosphere was inviting, thanks to the warm lighting and light wood display shelves.
Pretty soon, we realized that almost every item seemed to be on sale.
In some cases, the shelves were somewhat empty, suggesting the sales were doing their magic.
Some areas were completely devoid of any product whatsoever.
We found a massive selection of scented candles that we enjoyed browsing.
And some candles were included in a 2-for-$20 deal.
It quickly became clear that this store carried more than the basics. Not only were there dozens of candles with real wicks, but there were also electronic candles as well.
But while Pier 1 Imports carried a lot of unique and charming merchandise, a lot of it didn't seem to be useful for the average shopper.
This Sitting Buddha statue, though endearing, was an example of the type of merchandise that characterized the store. It was originally $149.95 but was going for 50% off.
There were a lot of other home-decor items that seemed to have little utility.
As we continued moving through the store, we noticed that the store had a lot of similar products being sold together. For example, the pillow selection was huge, but a lot of them looked pretty similar.
The story was similar when it came to rugs ...
... and decorative wall clocks. It seemed as though the store could afford to sacrifice some variety for a more streamlined display of merchandise.
Additionally, one could say that for a home goods store, the space was too large. The entire two floors of Pier 1 Imports were devoted to home goods, with a small area for some bath and body products.
And while this made for a huge selection, this strategy seems to be failing to reach the consumer.
Still, there were some assets to the store, like this monitor set up to assist customers in finding items online if they didn't have luck in the store ...
... and a same-day delivery option for certain items, likely a move to try and keep up with other retailers that have mastered the quick delivery game, like Amazon.
But overall, it was easy to observe why the company is struggling.
It's true that Pier 1 Imports had a huge variety of charming knickknacks and items. But the store could just not compete with the value of a discount home goods chain.
Even some items on clearance items didn't seem to be that cheap.
Without the lower prices of a discount chain like Home Goods or TJ Maxx, the charming and diverse options at Pier 1 Imports didn't seem like a strong enough factor in keeping the company in the clear and safe from the threat of its lower-priced competitors.
