In his public debut as Pier 1’s new CEO, Alasdair James told Wall Street analysts on Wednesday that the retailer may need a second brand to appeal to younger consumers.
James, who took over the top job at Pier 1 Imports on May 1 after leading Kmart for three years, said his long-term goal is to launch a new era of growth at the Fort Worth-based home furnishings company.
“The business has been hovering around sub-$2 billion (in sales) for the past several years and we absolutely have the opportunity to go well beyond that,” he said on the call. “Our next chapter will need to be about how we double the size of the business.”
With that in mind, James said his team is exploring how best to reach beyond its core customers, who are roughly 50 years old with annual household incomes over $100,000. He said a number of trials are underway at stores around the country, including some to “see what we need to have for an urban customer that is more oriented towards apartment living than suburban larger home living.”
The answer, he said, could be a new brand, a sub-brand or even an acquisition. “I’m not ruling anything out at the moment.”
James also said Pier 1 is beefing up analytics technology to fine-tune its marketing approach. He said he just hired a new chief information officer who is versed in artificial intelligence and machine learning to help target customers and find the best price points on merchandise.
James comes to Pier 1 as retailers continue to adjust to the growth of online shopping. Pier 1 has been steadily growing its e-commerce business, which generated about 25 percent of sales in the last quarter. It takes an omni-channel approach, meaning shoppers can order goods online and pick them up at the closest store, or order goods in stores to be delivered to their homes.
James’ message came as Pier 1 delivered disappointing first-quarter results. Sales dipped slightly and the company said it doesn’t expect a big improvement in the second quarter. Pier 1’s stock sold off by about 8 percent on Thursday.
Interestingly, for the second time, analysts heard a British accent from the Pier 1 CEO. A graduate of the University of Portsmouth, James worked for many years at the British retailer Tesco. Alex Smith, who the previously led Pier 1, also was British.