Pier 1 2009 Annual Report Download - page 11

continues to support the card through marketing programs and receives payments over the life of the
agreement for transaction level incentives, marketing support and other program terms.
In August 2007, the Company discontinued its e-commerce business. The Company continues to
use its web site, www.pier1.com, for marketing and product information, plus investor relations
purposes.
(b) Financial Information about Industry Segments.
In fiscal 2009, the Company conducted business as one operating segment consisting of the retail
sale of decorative home furnishings, gifts and related items.
Financial information with respect to the Company’s business is found in the Company’s
Consolidated Financial Statements, which are set forth in Item 8 herein.
(c) Narrative Description of Business.
The specialty retail operations of the Company consist of retail stores operating under the name
‘‘Pier 1 Imports’’, selling a wide variety of furniture, decorative home furnishings, dining and kitchen
goods, epicurean products, bath and bedding accessories, candles and other specialty items for the
home.
On February 28, 2009, the Company operated 1,011 Pier 1 Imports stores in the United States and
81 Pier 1 Imports stores in Canada. During fiscal 2009, the Company supplied merchandise and
licensed the Pier 1 Imports name to Grupo Sanborns and Sears Puerto Rico, which sold Pier 1 Imports
merchandise primarily in a ‘‘store within a store’’ format in 34 Sears Mexico stores, one Dorian’s store
and in seven Sears Puerto Rico stores. Pier 1 Imports stores in the United States and Canada average
approximately 9,900 gross square feet, which includes an average of approximately 7,900 square feet of
retail selling space. The stores consist of freestanding units located near shopping centers or malls and
in-line positions in major shopping centers. Pier 1 Imports operates in all major U.S. metropolitan
areas and many of the primary smaller markets. Pier 1 Imports stores generally have their highest sales
volumes during November and December as a result of the holiday selling season. In fiscal 2009, net
sales of the Company totaled $1.3 billion.
Pier 1 Imports offers a unique selection of merchandise consisting of more than 4,000 items
imported from over 50 countries around the world. While the broad categories of Pier 1 Imports’
merchandise remain fairly constant, individual items within these merchandise categories change
frequently in order to meet the changing demands and preferences of customers. The principal
categories of merchandise include the following:
DECORATIVE ACCESSORIES—This merchandise group constitutes the broadest category of
merchandise in Pier 1 Imports’ sales mix and contributed approximately 60% to Pier 1 Imports’
total U.S. and Canadian retail sales in fiscal year 2009, 59% in fiscal year 2008 and 57% in fiscal
year 2007. These items are imported primarily from Asian and European countries, as well as
some domestic sources. This category includes decorative wood accessories, lamps, vases, dried and
artificial flowers, baskets, ceramics, dinnerware, bath and fragrance products, candles, bedding,
epicurean products, and seasonal and gift items.
FURNITURE—This merchandise group consists of furniture and furniture cushions to be used
in living, dining, office, kitchen and bedroom areas, sunrooms, and on patios. Also included in this
group are wall decorations and mirrors. This product group constituted approximately 40% of Pier
1 Imports’ total U.S. and Canadian retail sales in fiscal year 2009, 41% in fiscal year 2008 and 43%
in fiscal year 2007. These goods are imported from a variety of countries such as Vietnam,
Malaysia, Brazil, Thailand, China, the Philippines, India and Indonesia, and are also obtained from
domestic sources. This merchandise is made of metal or handcrafted natural materials, including
rattan, pine, beech, rubberwood and selected hardwoods with either natural, stained, painted or
upholstered finishes.
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