The encyclopedia · Strategy & Leadership · Strategic decision · 2020
Pier 1 had 1,000 home decor stores — Amazon and Wayfair killed it
Pier 1 was the top US home decor chain with 1,000 stores — Amazon and Wayfair ate its market and the brand sold for $31 million in bankruptcy.
Pier 1 Imports
What happened
Pier 1 Imports was founded in 1962 in San Mateo, California, and grew into the largest specialty home decor retailer in the United States. At its peak it operated over 1,000 stores in the US and Canada with 18,000 employees and annual revenue of $1.55 billion. The chain was known for its eclectic, imported furniture and decorative accessories.
By 2019 the company was in serious trouble. Online rivals Amazon and Wayfair had captured the home decor market, and Pier 1's mall-based store model was losing relevance. The company reported a net loss of $198.8 million in fiscal 2019 and announced plans to close up to 450 stores. A search for a buyer failed.
Pier 1 filed for Chapter 11 bankruptcy on 17 February 2020. On 19 May it asked the court to close all remaining stores. Liquidation was approved on 30 May 2020 and all physical stores closed by 31 October 2020. The brand and website were sold to Retail Ecommerce Ventures for $31 million. Pier 1's 18,000 employees lost their jobs.
Why it happened
- Amazon and Wayfair captured the home decor market while Pier 1 remained reliant on physical stores in declining malls
- Pier 1 failed to build a competitive online presence — by 2019 the company was still a brick-and-mortar chain trying to be an e-commerce business
- A net loss of $198.8 million in fiscal 2019 showed the business model was already broken before the pandemic hit
- Planned closures of up to 450 stores and a failed sale process demonstrated that no buyer believed the chain could be turned around
The lesson
A specialty retailer that cannot build an online channel before the online-native competitors arrive is not disrupted — it is overtaken, one category at a time.
Sources
- Pier 1 Imports — Wikipedia
- CNN — Pier 1 is shutting down all its stores (bankruptcy, liquidation, 18,000 jobs lost)
- USA Today — Pier 1 Import store closings: Up to 450 stores to shutter (store closures, financial losses, online competition)
- Forbes — Is New Pier 1 CEO A Precursor To Something Else? (Pier 1's struggles, CEO changes, turnaround attempts)
- Retail Dive — Pier 1 to close up to 450 locations (store closure plan, financial losses, e-commerce gap)
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