FORT WORTH, Texas–Pier 1 Imports turned a $33 million net loss from the first quarter of 2008 into net income of $29 million for this year’s first quarter.
Pier 1 said it reported a gain of $47.8 million through the purchase of $79 million in its outstanding senior notes by one of its foreign subsidiaries. The retailer said its operating loss for the first quarter was $26.7 million, compared to $30.4 million in last year’s first quarter.
Pier 1’s merchandise margins in the quarter from 51 percent to 54 percent, thanks to reduced supply-chain costs and lessened clearance activity. In addition, it slimmed down selling, general and administrative expenses, store-occupancy costs and inventories.
The retailer said first-quarter sales dropped 9.4 percent to $281.1 million, which included a fall of 7.5 percent in same-store sales. Pier 1 also said it has reached agreements in principal with landlords to terminate the leases on 22 of its stores, and that it will close an additional five stores for which it hasn’t yet reached termination or rental-reduction agreements. The company said it had 1,073 Pier 1 Imports stores at the end of the first quarter.