
Wal-Mart (NYSE: WMT) has been struggling to reinvent itself as something other than just "always low prices". The company's efforts at high fashion have flopped, and same-store sales have been disappointing of late. Meanwhile, Pier 1 Imports (NASDAQ: PIR) has just plain struggled to stay alive amid store closings, the shuttering of its catalog and web businesses, declining sales and the loss of profitability. The company's shares have sagged from a high of $25 in 2003 all the way down to the current price of $8.49, representing a market cap of $750 million.
The company is working hard to try to find some way to compete with lower-priced products and imitators. Wal-Mart's problem is that it lacks the brand that Pier 1 has. Rightly or wrongly, people just feel tacky shopping for home furnishings at Wal-Mart.
Remember how K-Mart scored a big hit with its line of Martha Stewart Living Products? I wonder if Wal-Mart could do the same, and possibly more, with some kind of strategic partnership with Pier 1. What if Wal-Mart signed a deal to brand its home goods department as Pier 1, and brought in some of the company's marketing and design people to give the department a chic makeover. I bet that an alliance with Pier 1 could, overnight, increase Wal-Mart's decor sales by at least 10%. While the alliance might not be great for the Pier 1 brand, the company is bleeding red ink and needs to find some way to save itself. They would have to at least consider it.
Wal-Mart needs to figure out how to Target (NYSE: TGT) the more upscale consumer its main competitor has so successfully reached, and an alliance with Pier 1 seems like it could be one way to do that.











Reader Comments (Page 1 of 1)
6-27-2007 @ 9:31PM
Irene Alexich said...
Why not? We Americans are use to accepting cheap crap as good. We spend major dollars on crap that has no real value once we take it home. Then, we get tired of it and throw it out. Who wants a used set of Pier 1 dishes? Who wants my Pier 1 chair that I paid $200. for in 1999? Who wants my set of Waterford shot glasses that I got in 1999? A lot of folks. We buy it, use it and throw it out. Know wonder the rest of the world hates us. We are giant consuming pigs and economically stupid too.
6-27-2007 @ 9:31PM
marge said...
Wal-Mart should stay as they are . To bring in Pier 1 would eventually raise prices and could reflect on sales and profit and not to their advantage. I've been in Pier 1 and wasn't impressed. Maybe Wal-Mart should look for other sources?
6-27-2007 @ 10:16PM
zigzagg2 said...
Walmart should should just hold out in the near future they will have the country by the gazooes
6-28-2007 @ 6:12AM
Jack said...
Walmart spent years developing the bottom of the barrel stores that were flocked to by like people. One only has to drive into any waimart and your transformed to Mexico or Viet Nam. Why can't Walmart just be happy with the customers they have and they have plenty. Trying to make a silk purse out of a sows ear will never happen. For starters the Walton family will have to develpoe some class. Again the pigs ear thing..Walmart is a fixture in low class America and that's where they will always belong.
6-28-2007 @ 6:13AM
tom said...
WHY NOT WALLMART KEEPS GOING THEY CAN DRIVE EVERY
OTHER STORE OUT OF BUSINESS.
6-28-2007 @ 6:13AM
Barbara said...
yes i think walmart should link up with pier one.every loves walmart & pier one. and this would make walmart bigger and better.pier one is a very nice step up.(upscale)
6-28-2007 @ 6:14AM
Pete said...
I have never heard of anything so stupid. How do the individual stores compete against Wal-Mart, it wouldn't be have to the owners of the current stores.
6-28-2007 @ 9:16AM
Alan Cohen said...
Virtually everything at Wal Mart is low price sweatshop made Asian garbage. Mixing high end like Pier 1 into existing stores will just look like a more expensive junk shop. What Wal Mart needs to do is reinvent itself in the form of smaller high end stores with better quality items than the everyday Wal Mart stuff. They already have the Sams Clubs for bulk, what they need would be "Walton Shoppes" a new upscale limited line small store. In addition to that, they need to drastically change their corporate image with the customers. To do this, they need to treat their employees much better. I think with the volume of profits they make being what it is, 5% would probably suffice to take better care of employees. With their arch rival being Target, a little known fact of which Wal Mart, an American company can take advantage of, is that Target is French owned. With a few changes like that, Wal Mart would have it made. I mean, what right thinking American really wants to give their money to the stinking French by shopping at Target? Real American's have better taste than that, don't they?
6-28-2007 @ 9:41AM
Kay said...
Heavens no! I had a credit at Pier One and couldn't find anything in the store to use it on. Their buying staff is off on the wrong track! Such a joint venture would compound the problems of both companies.
6-28-2007 @ 11:09PM
bobbi said...
oh my GOD. NO NO NO. WALMART NEED TO GET THERE OWN ACT TOGETHER. THAT IS WITH IN THERE OWN STORES.
PIER I IS JUNK IF I GO IN THERE ONCE A YEAR THEY ARE LUCKY. I DON'T BUY ANTHING THERE. PLEAS JEFF DON'T GET INVOLVED WITH A LOOSER. I THINK THE CLOTHING AREA NEED TO BE MERCHANDISED BETTER REARRANGE THE FLOOR. CLOTHES UP FRONT AND OTHER MERCHANDISE ON THE SIDES. I'M A SHAREHOLDER AND I DO NOT THINK THIS MOVE WOULD BE IN THE BEST INTEREST OF SHAREHOLDERS. IT WOULD JUST BE A DRAG ON THE BOTTOM LINE. WHY WOULD ANYONE WANT TO PURCHASE A LOOSER FOR YEARS...THANK YOU.,
7-02-2007 @ 6:04AM
Lisa said...
I think it would be a bad move on Wal-Mart's part, and in a year or two, the Pier 1 brand (and even stores) would cease to exist. Not that it matters to me--I don't shop at Wal-Mart because I'm boycotting it for reasons long forgotten, and I don't shop Pier 1 because it's not convenient for me (location).