Pier 1 Imports announced yesterday that it will close up 450 locations. This is almost half of its 942 stores. It made this announcement after it unexpectedly reported quarterly earnings amid bankruptcy rumors. Pier 1 has been losing more than its sales have been declining. This latest quarter was no different. The third quarter loss was larger than a year ago as same-store sales fell 11.4 percent. The retailer of home furnishings stated that it plans to close certain distribution centers and cut its corporate expenses. This includes slashing its corporate staff. Pier 1 was a frequent target of bankruptcy watchers due to its poor financial position and high debt load.
Total Retail’s View: Pier 1 imports has seen sales declines for nine consecutive quarterly. It has suffered a decline in store traffic, just like many traditional brick-and mortar retailers. This has led to it losing market share to online competitors Wayfair and Amazon.com. Pier 1 is currently undergoing leadership transitions, in addition to its financial woes. Robert Riesbeck, the new CEO of Pier 1, was elected to replace Cheryl Bachelder who had been interim CEO since December 2018. Riesbeck was Pier 1’s Chief Financial Officer since July 2019. Riesbeck was Pier 1’s CFO since July 2019. Pier 1 could not continue to run stores that were losing money. The company will benefit from the cost savings of closing more than 400 stores. These can be used to improve the balance sheet and possibly reinvest in the business to expand its existing stores as well as boost Pier 1’s ecommerce business.
Macy’s will close 29 stores following holiday sales drop
The Washington Post reported Wednesday that Macy’s plans to close 29 Macy’s stores over the next few weeks. Following a reported 0.6% drop in same-store sales during holiday season, Macy’s will close 28 Macy’s department store locations and one Bloomingdale’s. This compares to the 1.1 per cent growth in November and December of last year. Macy’s has yet to specify the location of the store closings.
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Total Retail’s View:Macy’s has, for the most, been able to keep going during difficult times for brick-and-mortar retail, especially department stores. Macy’s 2019 sales numbers are disappointing, as the holiday season is crucial for all retailers. Neil Saunders is the managing director of GlobalData Retail. He said that this performance shows Macy’s “is still loosing customers and market share at an alarming rate.” The department store chain had to close its stores in the past, with job cuts and store closings in 2017. This was after a slow 2016 holiday season. Macy’s is still facing many challenges during its turnaround process, but we’re hopeful that 2020 will be better than 2016.