15234 Thu, 09/18/2008 - 12:55pm
FORT WORTH, Texas–Pier 1 will test new product categories this holiday season such as kitchen tools and gadgets, “a natural expansion” to its existing serveware business, Alex Smith, chief executive officer, said during a conference call to review second-quarter results.
The retailer is also capitalizing on new product categories that have been staples at retailers closing stores in this economic climate.
To that end, Pier 1 will introduce the first national brand into its mix with the launch of Yankee Candle this holiday. Although Smith did not mention any retailers’ names, Yankee Candle was listed as Linens ’n Things’ largest unsecured creditor when it filed for bankruptcy this summer.
Smith has been working new categories into Pier 1’s assortment since last year. In November 2007, the retailer tested jewelry and stationery, which will be expanded this fall, he said.
In its existing mix, tabletop has made a turnaround in sales and gross margins.
As it ramps up marketing, Pier 1 will return to television advertising with holiday ads that will run from mid-November to Dec. 22 on cable and satellite TV, but not broadcast networks.
In the ads, “the only celebrity is our merchandise,” Smith said, making a veiled reference to earlier campaigns with celebrities such as Kirstie Alley and home designer Thom Filicia.
The retailer shrunk its net loss to $30.2 million from $43.4 million in the year-ago quarter. Comparable-store sales declined 1.7 percent.
Total sales declined to $320 million from $345 million in the year-ago quarter, which largely reflects a decreased store count and the elimination of businesses. The retailer shed its e-commerce and Pier 1 Kids business last year.
In related news, Pier 1 named Michael Benkel senior vice president of planning and allocation. He joins the retailer from Pottery Barn, where he was vice president of inventory management.
“Economic headwinds have certainly slowed down our turnaround,” Smith said. “But they will not blow us off course.”