Pier 1 2009 Annual Report Download - page 30

Net sales during fiscal 2009 were $1,320.7 million, a decrease of $191.1 million or 12.6%, from
$1,511.8 million for the prior fiscal year. The decrease in sales for the fiscal year was comprised of the
following components (in thousands):
2009
Stores opened during fiscal 2008 .............................. $ 1,231
Comparable stores ........................................ (129,901)
Closed stores and other(1) ................................... (62,485)
Net decrease in sales ...................................... $(191,155)
(1) Includes a decrease in sales related to the absence of direct to consumer sales and sales
to third parties.
The total sales decline for fiscal 2009 was attributable to current macro-environmental conditions
which have caused a slowdown in consumer spending, a net decrease of 25 stores for the fiscal year
and a comparable store sales decline of 9.2%. The Company’s net sales from Canadian stores were
subject to fluctuation in currency conversion rates. These fluctuations had an unfavorable impact of
approximately 50 basis points on both net sales and comparable store calculations in fiscal 2009
compared to fiscal 2008.
During fiscal 2009, the Company opened one new store and closed 26 store locations. As of
February 28, 2009, the Company operated 1,092 stores in the United States and Canada. The Company
continues to evaluate every lease in its current real estate portfolio and will attempt to negotiate more
favorable occupancy costs in an effort to lower overall costs of leased properties. The Company
engaged a third-party real estate consulting firm to assist with these rent reduction efforts for existing
leases. If rental reductions cannot be negotiated on stores that have negative operating results, the
Company will attempt to negotiate a buyout or exercise any early termination rights and close these
stores. As a result of its efforts thus far, the Company now estimates that it will close no more than
80 stores in fiscal 2010.
A summary reconciliation of the Company’s stores open at the beginning of fiscal 2009, 2008 and
2007 to the number open at the end of each period follows (openings and closings include relocated
stores):
United States Canada Total
Open at February 25, 2006 ..................... 1,143 83 1,226
Openings ................................ 32 2 34
Closings ................................. (63) (1) (64)
Open at March 3, 2007 ....................... 1,112 84 1,196
Openings ................................ 4 — 4
Closings ................................. (82) (1) (83)
Open at March 1, 2008 ....................... 1,034 83 1,117
Openings ................................ 1 — 1
Closings ................................. (24) (2) (26)
Open at February 28, 2009(1) ................... 1,011 81 1,092
(1) The Company supplies merchandise and licenses the Pier 1 Imports name to Grupo
Sanborns, S.A. de C.V. and Sears Roebuck de Puerto Rico, Inc. which sell Pier 1 Imports
merchandise primarily in a ‘‘store within a store’’ format. At the end of fiscal 2009, there
were 35 and seven locations in Mexico and Puerto Rico, respectively.
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