Distressed home-decor retailer Pier 1 Imports Inc. is still reeling from growing competition as its latest turnaround plan stalls. Consequently, the retailer best known for its wicker and rattan furniture announced plans to discontinue its 10-cents-a-share quarterly dividend. The plan will allow the Fort Worth, Texas-based company to "provide financial stability as we execute Pier 1's turnaround strategy," CEO and chairman Marvin Girouard said in a statement. Girouard is retiring next February, the company said Sept. 30.
While most media outlets write about how Wal-Mart Stores Inc. devastates mom-and-pop retailers across the country, few discuss rival Target Corp.'s impact on national and regional niche retailers like Pier 1. While Wal-Mart goes for the bottom-rung of the retail ladder, Target has focused on a slightly more affluent shopper with its wares. Consequently, Target has expanded its home-decor offerings, even introducing a product line called Global Bazaar, which resembles Pier 1's internationally inspired products. In response to Target and other rivals, late last year Pier 1 added couches and other big-ticket furniture pieces to remain relevant. However, it's clear that the new lineup did not prompt shoppers to return, or the company wouldn't have cut its dividend.
Back in May, Pier 1 hired J.P. Morgan Chase to explore additional restructuring opportunities. There is a lone bidder according to The Street in the form of Jakup a Dul Jacobsen, the owner of Danish home furnishings retailer Jysk, which has 1,000 locations across Europe. However, Jacobsen or anyone else J.P. Morgan approached about an acquisition of the retailer is probably now waiting for a bankruptcy filing to snatch up its assets on the cheap.—Matthew Wurtzel
See story from MarketWatch
See story from The Street
See earlier post from Dealscape
Continue reading below
