Pier 1 2014 Annual Report Download - page 10

ITEM 1. BUSINESS.
MICHAEL A. CARTER, age 55, was named Senior Vice President, Compliance and General Counsel, Secretary of the Company
in January 2014. Prior to that and since December 2005, he served as Senior Vice President, General Counsel and Secretary of
the Company. Mr. Carter has served within the organization for 24 years in various leadership capacities, including Vice
President — Legal Affairs, and Corporate Counsel. Mr. Carter first became an officer of the Company in 1991. Mr. Carter is a
licensed attorney in the State of Texas. Prior to joining the Company, Mr. Carter practiced law with the Fort Worth, Texas law firm
of Brackett and Ellis, LLP.
LAURA A. COFFEY, age 47, was named Senior Vice President of Planning in January 2014. Ms. Coffey has served within the
organization for 17 years in various capacities, including Senior Vice President of Business Development and Strategic Planning
and Senior Vice President of Finance. Ms. Coffey first became an officer of the Company in 2005 and was named Principal
Accounting Officer in 2008. Prior to joining the Company, she held various positions with Alcon Laboratories and KPMG, LLP.
The executive officers of the Company are elected by the Board of Directors and hold office until their successors are elected or
appointed and qualified or until their earlier resignation or removal. None of the above executive officers has any family relationship
with any other of such officers or with any director of the Company. None of such officers was selected pursuant to any
arrangement or understanding between her or him and any other person, except for Mr. Smith, who serves as President and
Chief Executive Officer pursuant to an employment agreement with the Company.
Item 1A. Risk Factors.
Strategic Risks and Strategy Execution Risks
The Company must be able to anticipate, identify and respond to changing trends and
customer preferences for decorative home furnishings and gifts.
The success of the Company’s specialty retail business depends largely upon its ability to predict trends in decorative home
furnishings and gifts consistently and to provide merchandise that satisfies consumer demand in a timely manner. Consumer
preferences often change and may not be reasonably predicted. A majority of the Company’s merchandise is manufactured,
purchased and imported from countries around the world and may be ordered well in advance of the applicable selling season.
Extended lead times may make it difficult to respond rapidly to changes in consumer demand, and as a result, the Company may
be unable to react quickly and source needed merchandise. In addition, the Company’s vendors may not have the ability to
handle its increased demand for product or speed of replenishment. The seasonal nature of the business leads the Company to
purchase, and requires it to carry, a significant amount of inventory prior to its peak selling season. As a result, the Company may
be vulnerable to evolving home furnishing trends, changes in customer preferences, and pricing shifts, and may misjudge the
timing and selection of merchandise purchases. The Company’s failure to anticipate, predict and respond in a timely manner to
changing decorative home furnishing and gift trends could lead to lower sales and additional discounts and markdowns in an
effort to clear merchandise, which could have a negative impact on merchandise margins and, in turn, the results of operations.
Failure by the Company to identify and successfully implement strategic initiatives could
have a negative impact on the Company.
The Company’s strategies for long-term growth, strategic plans and capital allocation are dependent on the Company’s ability to
identify and successfully implement those initiatives. If they are not properly identified, developed and successfully executed, the
implementation of such initiatives may negatively impact the Company’s business operations and financial results. While the
Company believes these disruptions would be short-term, their adverse impact could be material.
The success of the business is dependent on factors affecting consumer spending that are
not controllable by the Company.
Consumer spending, including spending for the home and home-related furnishings, are dependent upon many factors beyond
general economic conditions (both domestic and international), and include, among others, levels of employment, disposable
consumer income, prevailing interest rates, changes in the housing market, consumer debt, costs of fuel and other energy
sources, inflation, fears of recession or actual recession periods, war and fears of war, pandemics, inclement weather, tax rates
and rate increases, consumer confidence in future economic conditions and global, national, regional and local political
conditions (including the possibility of a governmental shut down), and consumer perceptions of personal well-being and
6PIER 1 IMPORTS, INC. 2014 Form 10-K