Pier 1 Names New CEO: New Exec Leaving Parent of T.J. Maxx to Guide Struggling Retailer
By Maria Halkias, The Dallas Morning News
Jan. 31–Pier 1 Imports Inc. on Tuesday named a retail home furnishings executive with extensive global experience to succeed longtime chief executive Marvin G. Girouard, who retires next month.
Alexander W. Smith comes to the Fort Worth-based home accessories and furniture chain from TJX Cos., operator of T.J. Maxx, Marshall’s and other chains, where he was senior executive vice president and international group president. He has been a department store executive in Hong Kong and London.
Mr. Smith, a British citizen, will lead a home furnishings retailer that has suffered seven consecutive quarterly losses. Pier 1′s shares have lost about three-fourths of their value since early 2004.
Wall Street reacted positively Tuesday, sending Pier 1 shares up 49 cents, or 8 percent, to $6.60.
Mr. Smith, 54, will join the Pier 1 board when he becomes president and chief executive Feb. 19. Mr. Girouard retires at the same time after 32 years at Pier 1, including nine years as chairman and CEO.
“Alex’s knowledge and experience gained in a retail career of over 30 years, including his experience with well-known retail brands, makes him the right person to lead Pier 1 Imports back to its position as the leader in home furnishings, gifts and decorative accessories,” said Pier 1 board member Tom M. Thomas, who becomes non-executive chairman.
Mr. Smith and Mr. Girouard were not available for comment.
Harold D. “Hal” Reiter, chairman and CEO of Herbert Mines Associates, the New York-based executive search firm hired last year to identify candidates, said Tuesday that Mr. Smith has broad retail experience, including merchandising and operations.
He ran TJX’s U.K. home furnishings chain, T.K. Maxx, from 1995 to 2001. He was managing director of Hong Kong luxury department store Lane Crawford in the mid-1990s and spent several years in top positions before that with Liverpool-based department store chain Owen Owen.
Girouard’s departure
This isn’t the way Mr. Girouard planned to leave the company. When his departure was rumored last year, he said he wanted to turn the company around before going.
During his tenure, Pier 1 grew to an almost $2 billion-a-year chain and had several successful years, but the home furnishings business grew crowded in recent years as competitors Crate & Barrel, Pottery Barn, Kirkland’s, Z Gallery and others expanded into new markets, while discounters Target Corp. and Wal-Mart Stores Inc. upgraded their home furnishings merchandise.
Pier 1, which has 1,200 stores, lost market share the last two years as it tried to reinvent itself with a new catalog, Web site, modern furniture designs and higher prices. Marketing campaigns also failed to drive traffic. Nothing took hold enough to turn things around.
Clearer positioning
Goldman Sachs analyst Adrianne Shapira said in a research note Tuesday that Pier 1 should close underperforming stores and cut expenses accordingly.
The chain also needs “a clearer merchandise positioning” that’s more consistent with the company’s previous lower prices, higher volume strategy, she said.
Possible sale?
Mr. Smith’s hiring has Wall Street wondering whether a sale of Pier 1 is still in the works.
In May, Pier 1 hired J.P. Morgan to help it evaluate strategic alternatives.
It later sold its credit card business to J.P. Morgan Chase for $155 million.
It also sold its 40-store U.K. chain for $15 million to one of its largest shareholders, Lagerinn ehf, an Icelandic company owned by Jakup a Dul Jacobsen.
Mr. Jacobsen owns almost 10 percent of Pier 1 stock and has been an investor in other home furnishing chains.
Mr. Smith resigned Monday from TJX, which is based in Framingham, Mass.
On Tuesday TJX announced it had promoted president Carol Meyrowitz to CEO, a move the board had indicated last year was in the works.
Pier 1 said Mr. Smith’s base salary will be $1 million with a first-year bonus between $500,000 and $750,000.
His package includes options for 3 million Pier 1 common shares that vest through 2010, intended as an employment inducement.
Goldman Sachs’ Ms. Shapira said the heavy focus toward equity compensation is “a clear positive, aligning pay with potential turnaround plans.”
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Copyright (c) 2007, The Dallas Morning News
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