Shoppers looking for home furnishings online or furniture for kids have lost one option: Pier 1 Imports Inc. The home furnishing retailer best known for its wicker furniture announced Thursday a drastic corporate restructuring that calls for the closure of its clearance stores, Pier 1 Kids chain, as well as the shutting down of its catalog and Internet businesses, according to MarketWatch. In addition, Pier 1 will end TV advertising and rely on mailers. Meanwhile, Pier 1 will revamp its Web site solely for marketing. The changes were announced to improve a disappointing earnings announcement Thursday of a loss of $56.4 million, double the loss in the same year-ago period.
The company, which failed to sell itself at auction last year, has been under renewed pressure since April from minority shareholder Elliot Associates LP to make drastic changes. But is reducing advertising and e-commerce really the solution? The moves seem a bit shortsighted. In a time when businesses have been reaching customers without the physical presence of a store, it seems improving the shopping experience and offering better products online would be a better strategy. The company says it will save $50 million in marketing costs with its initiatives, but will those cuts generate losses bigger than its savings? —Gerald Magpily
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