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FINANCE
Fourth quarter, Pier 1 has had no respite because the channel has performed poorly and hinted that it could close up to 15% of its stores if certain goals are not met. He also announced the departure of his financial director.
In addition to presenting its results on Thursday, the troubled home decor and accessories retailer, named Deborah Rieger-Paganis, has been appointed interim chief financial officer, effective immediately. Her appointment follows the brutal departure of Nancy Walsh, who has been in the position for almost 15 months.
Net sales of Pier 1 fell 19.5% to $ 412.5 million in the quarter ended March 3, with missing estimates. The comparable store business turnover decreased by 13.7% over the 13-week period of fiscal 2018. The company felt that the shift of some holiday sale days, which n & # 39; 39; were not included in the fourth quarter of this fiscal year, had a negative impact on comparable sales in the fourth quarter of fiscal 2019. of about 750 basis points.
Net sales for the year decreased 13.7% to $ 1.6 billion. Same store sales decreased 11.0%.
Pier 1 closed with 973 stores, down 30% from the previous year. The retailer said it plans to close up to 45 sites this year due to the expiry of the leases. He has also reviewed his store portfolio and will seek to reduce his occupancy costs.
"The number of closures could reach up to 15% of stores if the company is not able to achieve performance objectives, sales targets and cost reductions of up to 15%. occupation and others, "said Pier 1.
Cheryl Bachelder, Acting CEO, appointed to the position following Alasdair James' sudden departure in December, said that, as expected, Pier 1's first-quarter sales and profitability were disappointing and reflected the identified execution issues. by the company at the beginning of the year. "Have worked with urgency to correct."
"Since December, we have assembled a competent management team, set up consulting expertise, launched a rapid diagnostic process and selected priority initiatives designed to improve our business model and financial performance," he said. she declared. "In the short term, we have moved out of some legacy inventories, reorganized our spring / summer marketing and marketing activities, and implemented a redesign of the organization to support our development plan."
Quay 1 implements an action plan designed to generate benefits of approximately $ 100 to $ 110 million during the fiscal year 2020 (current fiscal year) by restoring the structure of its margin and its costs. About one-third of the benefits should be in gross margin, the remaining two-thirds coming from cost reduction. After reinvesting in the business, the company estimates that it will be able to recover about $ 30 to $ 40 million in net income and an EBITDA of between $ 45 and $ 55 million during the year. FY2020 (its current year).
Quai 1 stated that it hoped to improve efficiency and improve the following areas: revenue and margin; marketing and promotional effectiveness; supply and supply chain; cost reduction; and store optimization.
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