Pier 1 Imports

Today we'll be taking a look at Pier 1 Imports. Pier 1 Imports history actually goes all the way back to 1962. I did not realize they were that old of a company when I started doing research for this video. Pier 1 Imports has been in and out of the news a lot lately because they're not doing well. They reported a loss of $100. 6 million for the second quarter of their fiscal year this year. And I have a feeling some of it has to do with things There's a lamp here that's normally $139. 99 and it's 20% off which still means it's going to cost you $112. That's insane. Things are way too expensive in this store for the kind of people that are in the market for new home decor items now. It's just completely out of touch. But I guess they're trying to stay in touch here with the gr To put in perspective how bad that $100. 6 million loss is, around the same time last year they had reported a $51. 1 million loss. So things seem to have gotten doubly bad for them in the last year. They also recently announced that they are willing to close up to 15% of their stores over the next year, which works out to over 140 locations of the around 950 that they have. They blame part of the loss on the fact that they've been clearancing a lot of things out of their store. And I believe their strategy is to start going for having higher margin items. I have a feeling this might be one of those higher margin items. This swinging chair is $429. 99. And then when you look closer, it doesn't even come with the cushion. That's going to cost you another $70. Oh, you want the stand? That's going to be another $199. 95. If you add all of that together, that entire chair setup costs $699. 94. That's ridiculous for something I have a feeling that has a very high markup. Now over here is their crystal wear collection. And all of these goblets and cups and things range from $10 to $15 apiece. And if you ask me, that's a little high for this kind of stuff when you consider that you can get glasses that look just as nice at Target and Walmart. And I've even seen some decent things at dollar stores. Okay, I will admit, these are kind of cool. I think Pier One might be in serious trouble. I'm not sure this strategy of clearancing out all your items in your stores at a loss and then trying to replace them with higher margin items is going to work. We'll have to see what happens in the next year. I think the next year is critical for them. I believe this first store we're looking at opened sometime around 1990. It's near Superstition Springs Center in Mesa, Arizona. And that mall opened in 1990. And from what I remember, that's right around the same time this Pier One opened. I'm very familiar with it. And I do have to say I really do That just screams 90s to me. And I'm pretty sure it's original. And it's in pretty great shape too. All of the Pier One stores that I've ever been to have always been very clean and very organized, if not a little bit cluttered. And the staff has always been super helpful too. So I think really the biggest problem they have right now is the stuff that they're selling at the price they're selling it at. Here's an example of what I'm talking about. Here'some decorative bookends. And they're pretty nice looking. They've got crystal balls in them, but they're $50. I guarantee you could find something just as nice at Target or maybe even Walmart for a lot less than that. And that seems to be where people are shopping for home decor stuff now. I don't know what I thought I was going to get by holding up to the camera Here'something else kind of interesting too. Here's the Magnolia home collection by Joanna Gaines. And if you watch HDTV at all, I'm sure you're familiar with Chip and Joanna Gaines. The thing is though, once again, they have a line of stuff at Target as well, home decor stuff. And it's a lot cheaper than the stuff here at Pier 1 Imports. Here'something getting a little bit back more to Pier 1 Imports roots though. Here's a chrome covered Indian Buddha statue that definitely sounds I know I've been fairly critical of Pier 1 Imports so far They've been listed on the New York Stock Exchange since 1970. That's another fact that I also found interesting in my research. Speaking of the New York Stock Exchange, Pier 1 Imports almost faced being delisted off the exchange because back in June of 2019, their stock price had dropped below 68 cents a share, which is less than the $1 minim To remedy this, they did what's called a reverse stock split, and they did it at a 20-to-1 ratio, which means for every 20 shares of Pier 1 stock that was out there, that all became one share. And by doing this, they were able to raise their stock price up to $13. 60, which kept them on the exchange, and this was back in June, but take a look at where their stock is at now. It's now October, and their stock price is down to less than $7 a share. It's right at about half of where it was when they did the 20-to-1 reverse stock split. That's definitely not good news for Pier 1. But let's head out of this store and take a look at a second store. Now this location is in Chandler, Arizona, and I was too stupid to film the front of it, so you're looking at a stock picture there of it. But here is the interior of the store, and you can see it doesn't look much different than the one we looked at earlier. This is definitely a newer store, but it has very much the same look and feel and also smell. That'something else I should mention about Pier 1 imports. In my experience, every Pier 1 store that I've been in has the same smell. It's this kind of incense candle type smell, and it's not a bad smell. I actually do enjoy it, but I just find it funny that it's the same in every store. And I guess again, that gets back to their roots of selling stuff to hippies back in the 60s. It's funny to think that's really who their target demographic was when they opened their first store in San Mateo, California in 1962. I'm reading this directly off the history section from their website, and it says, Our first customers were post-World War II baby boomers looking for beanbag chairs, love beads, and incense. Pier 1 has carried a wide selection of merchandise through the years. From chocolate covered ants to clothing lines to life-size Spanish suits of armor. Now they sell giant farmhouse style clocks. They really have changed to their target demographic is. I have to wonder where they would be at today if they stuck with being kind of the weird quirky store. These displays are pretty interesting because they're actually a pretty efficient way to cram this much of this type of product into one corner of the store. But then when you look down the hallway to the bathroom, they're even using the wall in there to sell you fake flower wreaths. And that leads to probably what's one of my biggest complaints with this store is that it's very crammed full of product. It is organized and clean, but man are the walkways narrow. Something I'm sure you've also noticed at this point is that there again is no customers in this store as well. This store was even less busy than the first one. Oh look a Papa-san chair. That's actually something they did sell back in the 60s when they first opened. I don't really find them very comfortable though. I don'think I've ever been in a really busy Pier 1 import store before, but I don't remember them being this dead and this one's near a very busy mall. So that's not a good sign for this location. Here's what I really do feel Oh I found it, the drink that somebody ditched in the middle of the dead store. They've got to do something to get people back into their stores. Their stores are fairly clean and nice and all of their employees that I've encountered seem to have been very friendly and helpful and this is the kind of decor stuff that people are buying. The problem is they're just buying it other places for less money. So I think Pier 1 really needs to work on the reputation they have of being expensive. What are your thoughts on Pier 1 though? Is it a store that you shop at regularly and do you think they're in as much trouble as I think they're in? Let me know down in the comments below. As always everyone, Want to see your name here? Head on over to patreon. com slash retail archeology to find out how you can help support the channel. If you enjoyed it, please make sure to hit those