Pier 1 2010 Annual Report Download - page 3

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Fellow Shareholders:
Three years ago we started on a journey to return our long-respected and admired Company to profitability. We
knew that we had a lot of work in front of us, but we certainly didn’t anticipate what would transpire. The
challenges that were inherent in the retail industry and our business, and the unexpected and unplanned difficulties
that the recession created, made the road especially difficult. Thanks to the hard work, smart decision making, and
clear focus on our business objectives by our dedicated associates, we got through it.
So here we are with a world of opportunity ahead of us. Our relationship with our customers, our operational
results and our entire organization are overwhelmingly stronger than they were when we embarked on this journey,
and it’s showing clearly in our sales and profitability, which continue to gain momentum.
We have many distinctive strengths, which will continue to help us move forward with confidence:
• We have strengthened the relationship with our customers, and new customers are discovering Pier 1
Imports every day.
• We have a strong and recognizable name, which has withstood the test of time.
• We have a huge reservoir of affection for and commitment to our Company, both internally and
externally.
• We remain the only home furnishings specialty store with a nationwide presence, putting us a short drive
from most of our customers and giving us the ability to leverage our marketing dollars.
• We have a robust and effective business model, which delivers highly favorable results.
• We work closely with creative and reliable vendors to deliver unique and authentic products to our
customers.
• We have extraordinarily talented and passionate associates who really care about Pier 1 Imports and bring
their best efforts to the workplace every day.
• We want to win.
Over the past three years, we have made real and sustainable improvements in every part of the business. But
there still remains great organic growth potential in our existing stores. There are many opportunities to improve our
sales per square foot and merchandise margin. Given our sustained ability to control costs, any improvements to
sales and margin will continue to flow to the bottom line.
To spur and support our growth and build on our current momentum, we need to invest further in the fabric of
our Company. For the last three years, our capital expenditures have been extremely modest. We conserved cash as
we worked our way through our restructuring and repositioning which allowed us to survive the terrible and
destructive recession. It’s time now to reinvest, not only because we have sufficient resources to do so, but more
importantly because the investment will help to generate additional cash from the business going forward. In this
coming fiscal year, we will invest resources in technology that facilitates improvements to our business processes.
In addition, we will reinvest in our stores with new fixtures, improved lighting and other major refurbishments.