Pier 1 Imports on Wednesday appointed a longtime board member to become interim CEO after Alasdair James stepped down. The Fort Worth, Texas-based home furnishings retailer, which has been struggling to reverse declining results for sometime, hired advisers to help it consider strategic alternatives, such as a sale of the company.
Cheryl Bachelder becomes interim CEO immediately, the company said, while the board works with Credit Suisse to evaluate actions to "enhance shareholder value."
Bachelder, 61, has been on Pier 1's board since 2012 and has 40 years of retail experience most recently as CEO of Popeyes Lousiana Kitchen from 2007 to 2017.
"We believe in the brand and about its ability to grow again in the future," Bachelder said on a conference call with analysts Wednesday afternoon. The company made the announcement after the market closed. Pier 1 Imports stock closed up 10 cents to $1.11 a share Wednesday, but was down by 14 percent in after hours trading.
James had been with Pier 1 since May 1, 2017 and came to the company from Sears Holdings where he was president of Kmart since 2014. James' decision to resign was not related to a disagreement with the company, Pier 1 said in a late filing Wednesday, and said his departure will be treated as far as severance as a "termination without cause." The board authorized the vesting of 71,633 shares that were part of its employment inducement grant.
"I accepted this role as a steward of a great company called Pier 1, which is defined by an iconic brand, dedicated retail store associates and loyal customers and vendor partners," Bachelder said. She added that she would work with the board and outside advisers to "quickly and decisively take action to put Pier 1 in a stronger position for the future."
As of Dec. 1, the company had $71 million in cash and no borrowings on its $350 million revolving credit facililty, which it recently amended to $400 million from an additional option of $50 million. It has $197 million of long term debt.
Pier 1 said there are no assurances that the process with Credit Suisse will result in any transaction and no timetable has been set. Bachelder will receive an annual salary of $1.1 million and will continue to receive $150,000 annual retainer as a board member, the filing said. She will not participate in executive incentive programs but received an inducement grant, given over three years of 729,927 shares provided she stays with the company.
Pier 1 also reported Wednesday a third quarter loss of $50.4 million, or 62 cents a share, versus a profit of $7.4 million, or 9 cents a share, a year ago. Same-store sales fell 10.5 percent in the quarter ended Dec. 1. Total sales fell 11.9 percent to $413.2 million from $469.2 million a year ago.
In April, James announced a three-year strategy he called "new day" that, Bachelder said, "did not deliver the desired results fast enough." His strategy focused on brand position, efforts to cut costs and drive sales growth.
Merchandise prices in some categories were lowered, but store traffic was down, Bachelder said.
Overall, home furnishings has been a category that's performed well, she said, but Pier 1 so far hasn't been able to capture that momentum.
During the conference call, an analyst asked about unprofitable stores. The number of stores that are "four-wall, cash flow negative is low.," said chief financial officer Nancy Walsh, adding that the company was still looking for the "right balance of stores."
Pier 1 closed 24 stores over the past 12 months and now operates 987 locations. Among them were a couple older locations in high-income Dallas neighborhoods at Preston and Royal and on W. Lovers Lane.
Bachelder and Walsh said they wouldn't talk about the current holiday quarter, but said last year's fourth-quarter sales declined 9.8 percent.
Donna Colaco joined the company earlier this month to be chief customer office. She came to Pier 1 from White House Black Market where she was president of the women's apparel and accessories chain owned by Chico's FAS Inc.
