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The Honolulu Advertiser
Posted on: Friday, July 5, 2002

Focus helps Pier 1 find its niche

By Julie Moran Alterio
(Westchester, N.Y.) Journal News

Live tropical fish, stone Buddha fountains and life-size suits of armor are just a few of the thousands of unusual items Pier 1 Imports has stocked during its 40 years as America's answer to a Middle Eastern bazaar.

Lois Slaughter of Poughquag, N.Y., looks over merchandise at Pier 1 in White Plains. Chairman Marvin Girouard has brought a sleeker approach that included ridding inventory such as stationery and clothing in favor of items such as candles and lamps.

Gannett News Service

But like the 1960s flower children who once shopped Pier 1 for incense, beads and beanbag chairs, the specialty retailer has grown up.

Pier 1's hallmark is still unique merchandise imported from 55 countries, but today's focus is on home decorations such as pillows, dishes and wicker furniture — what baby boomers are buying.

"I like to say they went from Volkswagens to Volvos," said Marvin J. Girouard, Pier 1's chairman and chief executive.

Girouard, 62, is behind Pier 1's sleeker approach. When he slipped into the CEO chair four years ago, he whittled Pier 1's 7,000 items to 4,000. He jettisoned low-margin goods such as greeting cards, clothing and stationery in favor of baskets, candles and lamps.

Customers responded, and sales rose from $1 billion in 1998 to $1.6 billion in the most recent fiscal year.

Lower prices, a new advertising campaign featuring former "Cheers" star Kirstie Alley and less-cluttered shelves are behind the turnaround, said New York retail consultant Howard Davidowitz.

"Pier 1 went from being a junk store with a little of everything to having a focused presentation of creative products," he said.

Pier 1's niche is between more expensive furniture retailers such as Pottery Barn and discounters such as Target.

The Pier 1 customer might have Pottery Barn aspirations, but a slimmer wallet, said Peter Levine, president of Desgrippes Gobe Consulting in New York. "If you were going into Pier 1 to spend a hundred bucks, you could get a lot: place mats, napkins, napkin rings and framed art," he said.

The store's best customers are women between ages 28 and 45 who earn $35,000 to $60,000 a year, Levine said.

A paradise for the "constant tweaker," Pier 1 offers shoppers an ever-changing mix of temptations. A set of four bamboo place mats from China costs just $5. A hand-painted serving bowl from Italy is $18. A woven coir rug from India runs $49. "The dedicated customers can always find something in there," Levine said.

Pier 1 no longer carries anything as esoteric as the 3-foot-tall brass rice cooker from India that made enough rice to feed a regimental army, but the retailer still imports merchandise from more than 1,000 factories worldwide.

Pier 1 designers attend furnishings fairs in Europe and Asia and collaborate with manufacturers to style products for an American audience.

Shortly after Girouard started with the company 27 years ago, he introduced one of Pier 1's signature products: the papasan chair.

Girouard said he noticed a smaller version of the round-cushioned rattan chair while on duty in the Navy in Vietnam. He bought a larger-scale version of the "mamasan" after a trip to Thailand during the 1970s as a buyer for Pier 1.

Pier 1 still sells 300,000 papasan chairs a year, but nearly 65 percent of the importer's merchandise assortment changes from year to year. "Our customers understand that if it's in Pier 1, you better buy it now because it won't be there next year," Girouard said.

Selling unique products is behind Pier 1's appeal as housewares rivals such as Bed, Bath & Beyond concentrate on branded merchandise. "What Pier 1 did was develop their own mix of products from all over the world," Davidowitz said.

"Unusual and affordable" is how Girouard describes Pier 1's merchandise. "Portable" is also apt — and the chief reason Pier 1 decided to stick with outdoor shopping centers and standalone stores when some rivals migrated to indoor malls. "Our big selling proposition is instant gratification. You see it, you look and you can take it with you," Girouard said.

The "Get in touch with your senses" advertising campaign that began two years ago emphasizes sights, smells, sounds, textures and colors as part of the shopping experience. "I've always been a shopper myself, and I've always believed that the environment you're going into has to be fun," Girouard said.

Alley became the spokeswoman for Pier 1 after she sent a picture and audiotape describing how she spent $50,000 at Pier 1, Girouard said.

After fixing Pier 1's image and merchandise mix, Girouard is set on expanding from today's 900-odd stores to 1,500 in the next decade.

Pier 1 stores are moving into smaller cities with populations of 30,000 to 200,000. New stores with 20,000 square feet of floor space — three times the size of an average store — are opening in affluent areas such as Honolulu and Southampton, N.Y.

The retailer opened its 737th store — its first in Hawai'i in Kaka'ako — in 1998.