The list keeps piling up, according to this recent CNN report Pier 1 Imports is closing 450 stores, the pain doesn’t just stop at the store level, Pier 1 announced its also shutting down distribution centers and dumping 40% of their corporate staff in an effort to better align its business with the current operating environment.
Pier 1 Imports will close nearly half of its stores and is reportedly nearing a bankruptcy filing.
The home goods retailer has been struggling for years against rising pressure online and from big-box rivals. Its stock, which was at $300 a share in 2015, is trading at around $5 today.
Pier 1 shares tumbled nearly 17% Monday. after Bloomberg reported the news of a potential bankruptcy.
Pier 1 operated 942 stores in the United States and Canada at the end of its latest quarter. It said Monday that it will close up to 450 stores “in order to better align its business with the current operating environment.” Pier 1 will also close distribution centers and lay off corporate employees.
While Walmart is finding strength in grocery, Target is finding it in apparel.
The retailer said the apparel category reaped the most “dramatic” market share gains in the latest quarter, when it reported earnings on Wednesday. It said apparel sales were up more than 10%, which also helped strengthen Target’s profit margins.
Clearly, Target’s efforts to get back to being known as “cheap chic” are working.
In the fashion department, it has refreshed stores to make individual brands look more like their own mini boutiques, with more mannequins and table displays showing off merchandise. It has launched dozens of in-house apparel brands over the past three years, such as “A New Day” for women, “Auden” for lingerie and Goodfellow & Co. for men. They’re all reasonably priced, with guys’ winter sweaters selling for under $30 and a women’s party skirt for $27.99.
Notably, Target is succeeding at a time when others are struggling to sell clothes.
Teen apparel retailer Forever 21 has filed for bankruptcy. And Kohl’s, when it reported earnings Tuesday, said women’s apparel was its weakest category during the period. Gap’s brands, including what had been its fast-growing Old Navy label, are struggling. Dressbarn is wrapping up liquidation sales at its remaining stores. Amazon keeps trying to grow in fashion but has struggled to persuade shoppers to buy more than basic apparel from its site.
“I think our commitment to our new store operating model, where we have dedicated business owners in that apparel category … is really driving great results,” Target CEO Brian Cornell said on a post-earnings call with analysts. “The combination of the work we’ve done with our own brand assortment, adding some new national brands like Levi’s in select stores, the service that we’re delivering in store, and the inspiration we’re creating online has really come together.”
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At no point has the cable industry or its executives been particularly keyed in to the “cord cutting” threat. As streaming video has chipped away at their subscriber bases, most cable giants like Spectrum and Comcast have responded by raising prices. And when confronted by growing evidence that cord cutting (defined as cutting the TV cord but keeping broadband) was a growing trend, most of these same executives spent years first denying cord cutting was happening, then trying to claim the only people doing so were lame man-children living in their moms’ basements.
Charter CEO Tom Rutledge was a key part of this cable executive myopia, both failing to see the trend coming, then failing utterly to respond to it in any meaningful way. The result: Charter has been losing subscribers for years, last quarter losing 75,000 cable TV customers. That’s not as bad as the 1.36 million pay TV customers lost by AT&T in the same period, but it’s not what you’d advertise as “good,” either.
Having no meaningful reputation on this subject to stand on, Rutledge last week tried to insist that the threat of users cancelling bloated, costly pay TV bundles and moving to streaming was a phenomenon that would soon slow down:
“I think in aggregate they’re going to slow down,” said Rutledge. “Because I think most single-family homes have big TVs in them and that’s where you get sports, that’s where you get news, that’s where you get live TV like this. It’s still going to be under price pressure. I’m not saying the category isn’t under pressure. But I think the rate of decline will slow.”
But there’s no actual evidence to support that conclusion. Cord cutting has only been accelerating and breaking records throughout 2019. And with a number of high profile streaming alternatives like Disney+ and Apple TV+ having launched this month, there’s absolutely no indication that trend is going to change. That’s something being made clear at research firms like UBS, which is actually predicting that things will be getting slightly better for AT&T, and marginally worse for cable giants like Charter:
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