Pier 1 2010 Annual Report Download - page 10

(b) Financial Information about Industry Segments.
In fiscal 2010, 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”, which sell a wide variety of furniture, decorative home furnishings, dining and kitchen goods, bath and
bedding accessories, candles, gifts and other specialty items for the home.
On February 27, 2010, the Company operated 973 Pier 1 Imports stores in the United States and 81 Pier 1
Imports stores in Canada. During fiscal 2010, 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 and one Dorian’s store. 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 2010, 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 throughout
the year imported from many 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 2010, 60% in fiscal year 2009 and 59% in fiscal year 2008. These
items are imported primarily from Asian and European countries, as well as some domestic sources. This
category includes decorative wood accents, lamps, vases, dried and artificial flowers, baskets, ceramics,
dinnerware, bath and fragrance products, candles, bedding, 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 2010, 40% in fiscal year 2009 and 41% in fiscal year 2008. 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 generally
made of metal or handcrafted natural materials, including rattan, pine, beech, rubberwood and selected
hardwoods with either natural, stained, painted or upholstered finishes.
Pier 1 Imports merchandise largely consists of items that feature a significant degree of
handcraftsmanship and are mostly imported directly from foreign suppliers. For the most part, the imported
merchandise is handcrafted in cottage industries and small factories. Pier 1 Imports has enjoyed long-standing
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