CEOs at the helm of floundering retail firms have already had a rough week, and it's only Monday.
What started last week with the ousting of Sharper Image's (NASDAQ:SHRP) founder and CEO, Richard Thalheimer, continued today as the CEO of Pacific Sunwear (NASDAQ:PSUN) resigned. So did the CEO of home-furnishings firm Pier 1 Imports (NYSE:PIR), Marvin J. Girouard, who announced he would be history by the end of February. Girouard has been with the company for 32 years and has been its CEO since 1998.
What all three companies have in common is that same-store and overall sales trends have been challenging in some cases, to say the least. While PacSun is still posting positive total sales, as weak comps are being offset by new store expansion, Sharper Image and Pier 1 have seen all sales fall off a cliff -- the latter projected a 28% drop in quarterly comps and a 22% hit to total sales.
Pier 1 has also had a rough couple of years, as total sales have fallen 5.7% on average each year. In its most recent quarter, total sales fell 12.5% while comps plummeted an icy 14.8%. The only thing holding up the stock recently has been speculation that Icelandic retailing firm Lagerinn might be interested in taking an ownership stake or buying the entire firm.
My problem with Pier 1 is that its struggling sales numbers may be due to secular trends rather than the short-term snafus that hit all retailers at some point. With two years of nonexistent growth, investors are beginning to speculate that customers are migrating to big-box giants such as Wal-Mart (NYSE:WMT) and Target (NYSE:TGT), which are offering trendy and affordable home furnishings like those found at Pier 1, but at lower prices.
Pier 1's stock is up 4% today, as news of a top management change could prove a catalyst to getting sales moving again. But until a specific individual is found, don't expect much of an operational turnaround. The process could take awhile, with a subsequent lag for the new CEO to put his stamp on the company's strategy and direction. Hopefully a retail turnaround veteran will be found; a similar move did wonders for RadioShack's (NYSE:RSH) stock over the short term. All that's left then is the more difficult execution of a new strategy. We'll see if Pier 1 can successfully move along the path to better days ahead.
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Fool contributor Ryan Fuhrmann is long shares of PacSun but has no financial interest in any other company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.
