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Bethany Biron
2020-02-18T16:22:00Z
- Pier 1 Imports officially filed for Chapter 11 bankruptcy on February 17, but for decades it was one of the most popular destinations for home goods and decor, particularly among young adults seeking hip, inexpensive furnishings.
- Founded in 1962, Pier 1 originally catered to "post-World War II baby boomers looking for beanbag chairs, love beads, and incense."
- However, by the turn of the century, Pier 1 had begun to struggle to keep up with competition from e-commerce giants like Walmart and Amazon, as well as from off-price retailers like Wayfair. Here's a closer look at the rise and fall of Pier 1.
- Visit Business Insider's homepage for more stories.
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Pier 1 filed for Chapter 11 bankruptcy on February 17, a month after the retailer announced plans to close 450 stores in response to a period of dwindling sales.
The company announced it is "pursuing a sale" with a March 23 deadline for "qualified binding bids," according to a Business Wire press release published on Monday. The announcement comes as the once thriving home goods company prepares to shutter nearly half of its 942 stores and potentially slash thousands of jobs, while also downsizing its corporate staff and closing select distribution centers.
Like countless other retailers, Pier 1 has suffered under increased competition from e-commerce giants like Amazon and Walmart, while also struggling against the rise of off-price and discount brands like TJ Maxx and Wayfair.
"While the market is growing, so too is competition," GlobalData Retail's Neil Saunders told Retail Dive in April 2019."As much as it is true that Pier 1's aesthetic used to make it distinct, others are now replicating this — at least in parts of their offers."
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However, before its sales woes, Pier 1 spent decades selling stylish yet affordable home goods to a demographic largely comprised of young adults furnishing their first homes and starting families. It brought styles like the Papasan chair to the US, becoming an emblematic part of 1960s culture and aesthetics.
As the fate of Pier 1 hangs in the balance, we took a look at the company's humble beginnings as a standalone store in California through its rise to a national home decor destination — and its current freefall into bankruptcy.
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Pier 1 Imports was founded in San Mateo, California, in 1962, originally under the name Import Cargo.
Source: Pier 1
The company described the early customers of its single-store location as "post-World War II baby boomers looking for beanbag chairs, love beads, and incense."
Source: Pier 1
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Pier 1 spent its early years embracing a targeted demographic of counterculture youth with its unique and eccentric inventory of cheap home goods.
One of Pier 1's earliest contributions was bringing the Papasan chair — also known as a bowl or moon chair — to popularity in the US.
Pier 1's early strategy was to import goods from Asia and sell them at a profit, while still pricing the items at a lower value than its competitors. One of these items was a "cocoon-like woven chair" native to Southeast Asia, which had a "groovy vibe" that became popular for 1960s homes, according to Atlas Obscura.
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Today the Papasan chair remains a staple of the Pier 1 store, and the website even dedicates an entire page to it, referring to them as "Sans" as a term of endearment.
The Papasan chairs are made with rattan, a material used to develop gondolas, hot air balloons, and suspension bridges, according to Pier 1.
In 1966, Pier 1 moved its headquarters to Dallas, Texas. By then, the company had expanded to 16 locations and begun to increase its product assortment.
Source: Pier 1
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Looking to capitalize on its rising profile, Pier 1 filed for an initial public offering in 1970.
The company used the momentum from its IPO to move into international markets, opening stores in Australia and Europe.
Source: Home Stratosphere
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In the following years, Pier 1 became the home goods destination it's known as today, thanks to a 1985 strategy shift that focused more on decorative items and interior design.
By the end of 1985, Pier 1's fleet was 265 stores strong and growing.
Source: Pier 1
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In 1993, Pier 1 opened its first store in Puerto Rico. It then spent the rest of the decade focused on international growth.
Source: Pier 1
In 2000, Pier 1 ushered in the internet craze and the advent of e-commerce by creating its first website, Pier1.com.
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Later that year, Pier 1 signed Kirstie Alley as its first celebrity spokesperson.
Pier 1 acquired Cargo Furniture and Home in 2001 and revamped the traditional family furniture store into a specialty children's home store.
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For its 40-year anniversary in 2002, Pier 1 honored its roots with the mantra "from hippie to hip" and offered up year-long promotions.
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However, the next decade brought several challenges for Pier 1, in large part due to mounting competition from more e-commerce-centric companies like Amazon and Walmart.
The company began to struggle to clear out inventory, and stores started to appear more disorganized and cluttered.
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Piles of untouched products were constantly on clearance.
In an attempt to draw more foot traffic during this time, Pier 1 experimented with new product categories, like bath and body products.
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It also turned its focus to dining and kitchen products, with new upscale "epicurean" collections.
Still, it wasn't enough. In 2018, former CEO Alasdair James said the company was planning to combat slumping sales by diversifying its products and aesthetic to better cater to millennials.
At the time, James said Pier 1 was also experimenting with concept stores designed to have less clutter.
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"It's become clear that we are not giving our Pier 1 customer the style, the value, the selection that she wants to find in our stores and online," interim CEO Cheryl A. Bachelder said in 2018.
"The sector is performing well," she continued. "So, we know the opportunity is there for Pier 1."
In January 2020, Pier 1 reported its eighth straight quarter of sales losses, coming off reports that the company is considering filing for Chapter 11 bankruptcy protection.
Source: Bloomberg
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"Although decisions that impact our associates are never easy, reducing the number of our brick-and-mortar locations is a necessary business decision," Pier 1 CEO Robert Riesbeck said in the earnings release.
"We thank our team of hard-working associates for their commitment to Pier 1 and to serving our customers," he said.
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On February 17, Pier 1 officially filed for Chapter 11 bankruptcy.
According to a Business Wire press release, the company is "pursuing a sale" with a deadline for "qualified binding bids" slated for March 23, 2020.
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