According to The Associated Press, the home decor industry is the "latest casualty of the ongoing housing and mortgage lending bust".
The purchase of new home furnishings is an easy expenditure for consumers to put off -- if people are anxious about their mortgage, or disheartened that their home isn't appreciating in value like it was a few years ago, that old couch starts to look a lot better.
All of this makes Pier 1 Imports (NYSE: PIR) look like a tough bet. The stock rallied last week on an analyst upgrade, but continues to face sales and margin pressures, in part because of lower-price competitors like Wal-Mart (NYSE: WMT). The company is in the midst of an attempted turnaround but the combination of competitive pressures and an industry-wide slowdown that recently claimed Bombay could be too much for the company to handle.
In the most recent quarter, Pier 1 saw its sales decline 7%, and it's going to be hard to turn that around if the industry as a whole continues to sputter.
In June, I suggested that it might be time for Wal-Mart and Pier 1 to team up. if Pier 1 continues to struggle with sales and profitability, and Wal-Mart continues to struggle to reach the more upscale demographic Target (NYSE: TGT) has nailed, it's something that both parties might want to consider.
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Reader Comments (Page 1 of 1)
10-08-2007 @ 2:12PM
jale3 said...
If Pier 1 and Wal-mart team up,,,, there goes the good stuff gone BAD !!! Not everybody likes to buy
Wal-Marts junk !!! Alot of people are FORCED to
buy there because they save on gas by not having to go from store to store for their needs.
10-08-2007 @ 3:25PM
Americas Watchdog said...
We have Americas Watchdog & the Homeowners Consumer Center & actually the housing crisis will soon affect a lot more than related retail sectors. We think the housing virus of 2007 & 2008 will be nearly lethal for, residential construction, retail, auto, electronics (Christmas sales that will not happen), etc.
When does Wall Street start to look 6 to 10 months out, as opposed to 6 to 10 minutes out? One more thing. If you have a commercial REIT, get out while the gettings good. Apartment rents will go down in the NE, SE, & SW in 2008 and commercial vacancies will increase.