Pier 1 2013 Annual Report Download - page 8

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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 2013, net sales of the Company totaled $1.7 billion.
Pier 1 Imports offers a unique selection of merchandise consisting of items 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 has remained constant at 61% of Pier 1 Imports’ total U.S. and
Canadian retail sales in fiscal years 2013, 2012, and 2011. These items are imported primarily from Asian
and European countries, as well as some domestic sources. This merchandise group includes decorative
accents, lamps, vases, dried and artificial flowers, baskets, ceramics, dinnerware, bath and fragrance
products, candles, 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 group has remained constant at 39% of Pier 1 Imports’ total U.S. and
Canadian retail sales in fiscal years 2013, 2012, and 2011. 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 group 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
relationships with many vendors and agents and is not dependent on any particular supplier. The Company
believes alternative sources of merchandise could be procured over a reasonable period of time, if necessary. In
selecting the source of merchandise, Pier 1 Imports considers quality, dependability of delivery, and cost. During
fiscal 2013, Pier 1 Imports sold merchandise imported from many different countries with approximately 58.6%
of its sales derived from merchandise produced in China, approximately 12.8% derived from merchandise
produced in India, and approximately 19.3% collectively derived from merchandise produced in Vietnam,
Indonesia, and the United States. The remainder of its merchandise is sourced from other countries around the
world.
Imported and domestic merchandise is delivered to the Company’s distribution centers, where
merchandise is received, allocated and shipped to the various stores in each distribution center’s region, and/or
shipped directly to customers.
The Company owns a number of federally registered trademarks and service marks under which Pier 1
Imports stores conduct business. Additionally, the Company has registered and has applications pending for the
registration of certain other Pier 1 Imports trademarks and service marks in the United States, Canada and other
foreign countries. The Company believes that its marks have significant value and are important in its marketing
efforts. The Company maintains a policy of pursuing registration of its marks and opposing any infringement of
its marks.
The Company operates in the highly competitive specialty home retail business, both in its stores and
e-Commerce business, and competes primarily with specialty sections of large department stores, furniture and
decorative home furnishings retailers, small specialty stores and mass merchandising discounters.
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