Three years after shuttering its failing e-commerce site, Pier 1 Imports Inc. (PIR) announced this week that it is bringing back a modified model for web retail that will launch next year.
CEO Alex W. Smith broke the news to shareholders at the company’s 40th annual meeting, boldly proclaiming that Pier 1 has not only survived the recent U.S. recession, but has emerged from the three-year period since closing its ecommerce operations “stronger and fitter”, flush with $188 million in cash and nearly debt-free.
Management continues to keep a close eye on the health of the economy but, “if there are bumps in the road, we have the right people and product in place to handle it,” Smith said.
Recent economic reporting seems to confirm Smith’s claims. The Fort Worth-based company posted a first quarter profit in early June, its first in six years. Same-store sales increased by 14 percent in this year’s first quarter as well, and Smith predicted that June is shaping up to be another strong month for the home furnishing retailer.
The new e-commerce operation will be a bit of a departure from traditional web retailing, so Pier 1 fans should probably temper their expectations for a full-service offering.
Starting in September, Pier 1 will resume posting merchandise on its site in advance of the actual launch of a ‘site-to-store’ model early in 2011. Shoppers will be able to browse, research and purchase products on the Pier 1 site, but they will need to visit one of the chain’s top 100 stores to pick up the merchandise. Pier 1 currently has about 1,050 physical locations total nationwide.
Smith asserts that this “store delivery” model is significantly less risky than investing in, and building up, the infrastructure needed to operate a central shipping location for web-bought items.
Nevertheless, eliminating shipping from the online shopping experience altogether and forcing shoppers to drive somewhere to pick up their merchandise sounds a bit risky to us, particularly since there’s no guarantee that a shopper’s most convenient store location will be one that is included in among the pick-up options.
But it could just be the opening round of Pier 1’s future e-commerce strategy, starting small and building gradually over time rather than rushing back into an area where the company had a lot of trouble in past.
Pier 1 made the decision in 2007 to cease online sales to focus instead on store operations and address the massive loss of money across all of its major focus areas, including a catalog business and kids’ furnishing chain.
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