A Pier 1 Imports store in New York.
Craig Warga | Bloomberg | Getty Images
Store closures by Pier 1 Imports could mean good news for other retailers that sell home furnishings and other knickknacks.
Pier 1 announced earlier this month that it intends to close up to 450 locations, or almost half its fleet of 942 stores, as it unexpectedly reported quarterly earnings amid bankruptcy rumors. Some stores have already kicked off final closing sales. The company has yet to release a complete list of locations set to go dark.
While Wayfair operates primarily online, a geographical study by Telsey found that 60% of At Home’s stores, 59% of HomeGoods’ stores and 35% of Target’s stores have a Pier 1 location within three miles.
It has estimated the home furnishings market in the U.S. to be about $200 billion. And Telsey analyst Cristina Fernandez has estimated that if Pier 1 were to shutter all of its stores, At Home, Wayfair and HomeGoods would see a 100-basis-point sales lift, while Target would see a 20-basis-point lift.
A representative from Pier 1 wasn’t immediately able to respond to CNBC’s request for comment.
Still, there’s one company you might have expected to be on Telsey’s list but isn’t: Bed Bath & Beyond. Telsey’s analysis showed that Bed Bath & Beyond has the most geographic overlap with Pier 1 across the U.S. But the firm said Bed Bath hasn’t been able to “capitalize on Pier 1’s displaced sales …. given its own struggles.”
Forth-seven percent of Bed Bath’s stores are within only one mile of a Pier 1 store, Telsey said. And 59% of them are within three miles.
Bed Bath & Beyond is in the midst of its own turnaround, with new CEO Mark Tritton at the helm. Tritton most recently was chief merchandising officer at Target. If he can help right the ship at Bed Bath, Tritton could have an even bigger opportunity to grow sales and attract new customers, given Pier 1’s struggles. But he will have to act relatively quickly, or risk Wayfair winning more market share online.
In its latest reported fiscal year, Pier 1 said it had net sales of $1.6 billion, down 13.7% from the prior year.
Pier 1 shares, which trade around $3.66, were up a little more than 5% Tuesday morning. The company is valued at $14.8 million. Pier 1 has watched its stock tumble more than 75% over the past 12 months.
Wayfair, which has a market value of nearly $10 billion, has seen its stock rise nearly 4% over the past year.