Bankrupt - Pier 1 Imports

one claims it's the company's only chance for survival [Music] atari has filed for chapter 11 bankruptcy protection 31 year old pwa presents the difference kodak is filing for chapter 11 bankruptcy protection [Music] what's up guys my name is jake and welcome to the ninth episode of bankrupt if you've ever sought out to decorate your own living space you'll know it's a crowded market full of many options just a few years and decades ago however there was one brand which was likely on the top of that list for many people even further back it was one of the only quality and interesting options to buy from but over a rather short amount of time they lost their way and eventually collapsed entirely in 2020. so let's take a deeper look into what happened to this classic well-known brick and mortar chain and how pier one imports ultimately went bankrupt this episode is sponsored by curiositystream get it as well as the creator run nebula by using the link in the description below san mateo california was the location of their first store it was created by luther henderson and later invested in by charles tandy tandy might sound familiar for some of you mainly because he was the business mind behind radio shack they opened in 1962 under the name cost plus imports and the premise was to import cheap rating furniture and sell it at a markup within a liquidation store format it was already very popular and by 1966 they had started importing even more exotic goods from asia and changed their name to pier 1 imports by the next year sales had grown to over 4.5 million dollars annually and steadily increasing as sales grew by now they had multiple locations across the country and with ambition to grow even more they filed for an initial public offering on the american stock exchange it was now 1970 and this effort proved to be very effective now giving the fort worth-based company lots of capital to expand just within a few years the brand grew to over 120 stores with enormous sales growth by the early 1980s they continued that momentum now doubling their stores to over 260 and posting 165 million dollars in sales things were changing for the company as they began to shift their entire product strategy away from exotic overseas goods to more traditional and contemporary items a healthy mix between the two they were now targeting the ever lucrative first-time and sophisticated homeowners in america this monumental shift worked and pier 1 had now become the go-to brand for those who wanted to decorate themselves with quality stylish items luckily for them in a survey they conducted in the mid-1980s 86 percent of people claimed they decorated their own home when the media reported on the survey pier one was front and center essentially being advertised alongside their findings the brand was quickly becoming the most popular place for amateur interior designers to shop and now with their new preferred cardholder membership customers were not only returning to pier 1 but they were also spending much more by 1989 there were over 550 stores producing over 517 million dollars in sales the brand expanded internationally now too opening stores in new countries however it was the early 1990s which now saw a slowing economy and more competition two potentially deadly combinations if not handled right so pier 1 imports applied the brakes a bit during this time the corporation had done some restructuring ultimately stabilizing losses yet taking on some long-term debt however at least for now pure1 imports was on top of their markets still the go-to place for home accessories in 1994 they posted 685 million dollars in sales and grew their stores to over 600 the chain also expanded their product availability still offering unique goods from overseas while also fleshing out other categories like kitchen furniture and gift accessories all allowed the company to grow year after year but still their ceo clark johnson had even bigger aspirations as more stores continued to open across the world pier 1 imports had reached their long-term goal when they surpassed 1 billion dollars in sales by the end of 1998. however as the millennium approached the news wasn't as good as it appeared 2000 while earning lots and sales the year over year growth had slowed rather dramatically this was also another time when similar furniture and home accessory stores started to gain some steam which ultimately started to bite away at pier one's market share brands like creighton barrel or especially pottery barn began luring customers away but that didn't stop them from expanding which once again was back in full force by around 2003 the company had opened their 1 000th store and posted 1.7 billion dollars in sales with 129 million dollars of that being profits which is pretty good and by far the highest ever achieved for the brand the products in the stores were priced much lower than the rivals which caused a huge influx of customers they were absolutely killing it in sales during this time as pure1 had now become a household name across north america their stock price too was drifting into insane waters as they crossed 500 a share back in their stores pier 1 had been making it clear that while importing foreign treasures was still a big part of their product line they were also expanding categories in furniture kitchen accessories and pillows however in reality their place in the market was becoming the go-to brand for people who wanted something that pottery barn yet couldn't afford it pier one was becoming a discount pottery barn 2006 is when the company had peaked with the number of stores they had open across the world there were over 1 300 pier 1 import locations all of them very much not ready for the next few years by 2009 the recession had hit and their stock took a nosedive all the way down to two dollars by march the company was forced to close stores and lost almost 130 million dollars that year the recession had crippled the brand which just a few years prior was posting their highest sales figures ever the company's ceo position was switched out and alex smith took the helm guiding the brand out of this precarious spot by 2010 they regained profitability and did so for the next eight years their stock price too rebounded quite significantly shooting back up to over 470 dollars a 20 000 increase which i'm sure made many investors a lot of money however with sales approaching the 2 billion dollar mark the company had looming issues that weren't entirely apparent at first glance mr smith had turned the company around however when he left in 2016 things began to fall apart in 2017 sales were already on a downward trend as was profit by the following year it was even worse and by 2019 the company had lost almost 200 million dollars by the end of that year pier one was now capturing just a little over two percent of the entire market things were getting bad and the brand bled money every quarter the coming pandemic of 2020 was going to be the final blow with a final push to market to young buyers the long downfall had finally come to its end the brand had almost 250 million dollars in long-term debt in order to pay that off and recover from their dire financial situation 2020 would have needed to be a great year for the company of course however that's not how things turned out after announcing they would close over 400 stores by the next month pier 1 imports had filed for chapter 11 bankruptcy protection in this filing they also announced they would be shutting down the entirety of their canadian operations by may with the united states imposing closure restrictions for retail pier 1 had decided to liquefy its remaining assets after no buyers were found to bail the company out this was the end of pier one stores to put this in perspective their stock went from 503 dollars a share in may of 2013 down to just 24 cents today i don't think i've ever seen that sharp of a drop for a stock price ever in that span of time for a retail brand it is a staggering fall from the top however while locations began to close all across america and the world their intellectual property and online e-commerce operations were purchased by rev or retail e-commerce ventures which is strangely co-owned by tai lopez here in my garage okay but how did this happen because while the unprecedented events of 2020 surely did accelerate their demise it certainly isn't the only or even the primary reason it really all began with their first attempt on creating a website in june 2000. it was rudimentary with little online inventory which eliminated the main draw of searching for hidden treasures in the store it was a costly endeavor by the company and ultimately it was shut down in 2007. this allowed the competition to take its place in the online e-commerce as pure1 stuck to just brick and mortar eventually in 2012 they've relaunched the website however the damage was done but it's not just online sales that they handled poorly it was in their stores and even where those stores were placed pier 1 began adding locations and cheaper plazas often next to discount stores or unrelated market retail this started a perception issue with the brand and inside the stores things weren't much better the chains struggled to move inventory which meant their stores would constantly have clearance shells with tons of stock in them this caused their stores to appear clutter and not well organized just further hindering the brand reputation and consumers desire to shop there the products that were on the shelves were generic and undistinguished from other cheap home stores remember pier 1 had started out as a treasure hunt for people to come into their stores and find unique items and contemporary home products the makeup of their inventory did as well in a february 2020 new york times article they quote professor hart posen from the university of wisconsin school of business he summed it up best by saying quote 20 years ago you could look at a product and you would really know that it came from pure one that compared to now would anyone care if pier 1 disappeared i think the answer is no the thing that ultimately killed pier 1 though was its competition everything else was certainly a contributing factor and even played to the other guy's advantage but really the market they had dominated in had become over saturated pottery barn cretan barrel and restoration hardware took the premium side while bed bath and beyond home goods ikea and so many others stand in between the cheap to middle ground part that's not to mention the purely online companies like amazon and especially wayfair which just by a few clicks of a mouse can get a brand new coffee table sent directly to your doorstep pier 1 just couldn't keep up with those other brands as much as they tried those stores were offering similar products at cheaper prices which forced pier 1 to slash theirs still though many consumers had thought their products were still way too expensive for what they were getting especially when they knew that other stores like marshalls and even target offered basically the same thing yet cheaper pure1 imports simply outgrew itself the word imports doesn't mean the same thing to customers now imports is now synonymous with synthetic and cheaply made products not like the exotic craftsmanship it meant back when they started but surviving the modern retail landscape especially one as competitive as home furnishings was just not possible for them by the end i mean even when i look at my own situation i have always known about pier 1 but i never made the trip there as an adult i always cited for creighton barrel or pottery barn since they are the brands best known for quality products regardless if even my perception was wrong i always thought of pure1 as an overpriced store with sort of crappy products and i have a feeling that's what many others thought too and that's not a great brand perception in today's market especially when you're trying to survive mainly on in-store sales so while management thought they were doing the right thing by endless discounts and changing their products to fit more in line with other retailers it really ended up hindering the company and ultimately left them bankrupt the department store and really all of retail has come a staggeringly long way it's been an incredible evolution and one i often detail the companies who can't keep up i think it's important and very interesting however to see where it all started and the two-part docu-series the birth of shopping presents that very story i very much enjoyed it and you can only find it on this episode's sponsor curiosity stream they have an enormous catalog of high quality documentaries on a range of topics if you enjoy my videos then you'll absolutely find something on there which is both educational yet very entertaining partnered with them is another streaming service which i am actually a part of called nebula there you can enjoy even more content from creators which i love as well as my videos a full day before they're released on youtube you can get both services for just 2.99 but if you go to curiositystream.com bsf and use the code bsf you can get 26 off an annual plan anyway guys my name is jake and thank you very much for [Music] is watching cold you hold me try to melt my soul makes it harder to say and goodbye eyes makes me feel as cold as eyes

Channel: Bright Sun Films

Views: 394,391

Rating: 4.9614472 out of 5

Keywords: BANKRUPT 9, Bankrupt store, bankrupt company, Tandy corporation, pottery barn, Pier 1 Imports, Cost Plus, Tai Lopez, Restoration, restoration hardware, abandoned store, closing stores, bankruptcy, corporation mistake, home goods, marshals, target, home furnishing stores, Jake williams, bright sun films, 2020, PG, clean, family friendly, documentary, corporation doc, Pier 1, failed company, failed retail, malls, strip malls, story of, 2021, future of company, what happened, exotic

Id: 24j9Cp19It8

Length: 14min 55sec (895 seconds)

Published: Fri Oct 23 2020