Pier 1 2013 Annual Report Download - page 7

PART I
Item 1. Business.
(a) General Development of Business.
Pier 1 Imports, Inc. was incorporated as a Delaware corporation in 1986. Throughout this report,
references to the “Company” include Pier 1 Imports, Inc. and its consolidated subsidiaries. References to “Pier 1
Imports” relate to the Company’s retail locations and e-Commerce operations conducting business under the
name Pier 1 Imports®.
As of March 2, 2013, the Company had 1,062 stores in the United States and Canada. In fiscal 2013, the
Company opened 22 new Pier 1 Imports stores and closed 12 stores. Subject to changes in the retail environment,
availability of suitable store sites, and lease renewal negotiations, the Company plans to open approximately
30 new Pier 1 Imports stores and close 14 stores during fiscal 2014. During fiscal 2013, the Company also
refurbished approximately 100 stores with a new merchandise fixture package and lighting upgrades, completed
major remodels at four locations, and added some new fixtures throughout all stores. The Company operates
regional distribution center facilities in or near Baltimore, Maryland; Columbus, Ohio; Fort Worth, Texas;
Ontario, California; Savannah, Georgia; and Tacoma, Washington. At the end of July 2012, the Company
successfully executed the launch of its new e-Commerce enabled website, Pier1.com.
The Company has an arrangement to supply Grupo Sanborns, S.A. de C.V. (“Grupo Sanborns”) with
Pier 1 Imports merchandise to be sold primarily in a “store within a store” format in certain stores operated by
Grupo Sanborns’ subsidiaries, Sears Operadora de Mexico, S.A. de C.V. (“Sears Mexico”) and Corporacion de
Tiendas Internationales, S.A. de C.V. (“Sears El Salvador”). The agreements with Grupo Sanborns will expire
January 1, 2017. The agreements are structured in a manner which substantially insulates the Company from
currency fluctuations in the value of the Mexican peso. As of March 2, 2013, Pier 1 Imports merchandise was
offered in 49 Sears Mexico stores and one Sears El Salvador store. Since Sears Mexico and Sears El Salvador
operate these locations, the Company has no employees or real estate obligations in Mexico or El Salvador.
(b) Financial Information about Industry Segments.
In fiscal 2013, the Company conducted business as one operating segment consisting of the retail sales 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 and e-Commerce operations
conducting business under the name “Pier 1 Imports,” which sell a wide variety of furniture, decorative home
furnishings, dining and kitchen goods, candles, gifts and other specialty items for the home.
As of March 2, 2013, the Company operated 982 Pier 1 Imports stores in the United States and 80 Pier 1
Imports stores in Canada. During fiscal 2013, the Company supplied merchandise and licensed the Pier 1 Imports
name to Grupo Sanborns, which sold Pier 1 Imports merchandise primarily in a “store within a store” format in
49 Sears Mexico stores and one store in El Salvador. 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
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