Pier 1 Imports CEO Alex Smith to step down at end of the year

Alex Smith, who led a turnaround at Pier 1 Imports before heightened competition from online retailers pinched results in recent years, will step down as president and chief executive officer at the end of the year, the company announced Wednesday.

In a statement, Pier 1 said that the board of directors and Smith had mutually agreed upon the transition plan. The announcement came as the Fort Worth-based retailer disclosed the latest in a string of disappointing sales reports, saying that preliminary net sales for the most recent quarter ended Aug. 27 declined by 6.7 percent. Full results for the quarter will be released on Sept. 28.

Terry London, Pier 1’s chairman, commended Smith for leading “a remarkable turnaround of the business from 2009 to 2013, creating one of the most profitable specialty stores in our sector” and more recently revamping its e-commerce business.

The company said its board “is executing its existing succession planning process and is working with Korn Ferry to conduct a search for a new CEO.”

Smith, 64, will also leave the board of directors.

“Leading the Pier 1 Imports team for nearly 10 years has been a joy,” Smith said in a statement. “Now it’s time for me to do something new. I wish the best for Pier 1 Imports — a strong brand and a great company.”

A British native, Smith joined Pier 1 in February 2007 after spending 12 years at TJX, the parent of T.J. Maxx. At the time, Pier 1 had lost money for seven straight quarters.

Upon arriving in Fort Worth, Smith set his sights on refreshing Pier 1’s merchandise, widening the eclectic array of goods and backing away from a move into more modern furniture that had not resonated with consumers. He also shut down the company’s e-commerce site to focus on its stores.

The website would be resurrected in 2013, as online competitors were rapidly growing. But Pier 1 has struggled to keep up since, with profits squeezed by investments in expanding fulfillment centers while facing pricing pressure in its stores.

Last year, profits at Pier 1 declined nearly 50 percent, to $39.6 million, and sales increased less than 1 percent, to $1.89 billion. In its first fiscal quarter of 2016, Pier 1 lost $6 million as sales decreased by 4.3 percent.

Pier 1 expects to report a loss for the second quarter as well. In its preliminary estimates released after the stock market closed, the company said it expects to report a loss of 5 or 6 cents, excluding any one-time costs related to Smith’s impending departure.

Investors took a sour view of the numbers. Pier 1 shares dropped 40 cents, or more than 8 percent, to $4.40 in after-hours trading following the news release.

This story was originally published September 7, 2016 at 4:41 PM with the headline "Pier 1 Imports CEO Alex Smith to step down at end of the year."