Dive Brief:

• Pier 1 Imports Inc. said Wednesday that Alex W. Smith will step down as president and CEO effective Dec. 31, 2016. Smith also will resign his position on the company's board of directors. The home furnishings and decor retailer is working with executive search firm Korn Ferry to find a replacement.

• Pier 1 stock has declined since Feb. 2015, when CFO Cary Turner abruptly resigned. It is widely believed that Smith fired Turner, a 23-year Pier 1 veteran, according to the Dallas Morning News.

• Also on Wednesday, Pier 1 released a preliminary fiscal second-quarter report indicating that net sales slipped 6.7% year over year and same-store sales fell 4.3%. The wider-than-expected Q2 loss is expected to range between $0.06 to $0.05 per share, excluding one-time items (if any) related to Smith’s departure, the company said. Pier 1 shares fell more than 10% late Wednesday in the wake of the news.

Dive Insight:

Pier 1 Chairman Terry London praised Smith for leading "a remarkable turnaround of the business from 2009 to 2013, creating one of the most profitable specialty stores in our sector." London also gave Smith props for boosting the retailer’s e-commerce business, which was more or less non-existent when he took over 10 years ago: Digital sales accounted for some 20% of total sales in the second quarter, the company said Wednesday.

But Smith's initial turnaround gains have given way to continued sales struggles, and the disappointments have kept coming, culminating in Wednesday's preliminary earnings report.

“Although ongoing store traffic challenges impacted our top line results, we were able to drive year-over-year improvement in our merchandise margin rate through a more balanced promotional strategy and improved operational execution in our distribution centers,” Smith said in a statement. “We continue to focus on closely managing inventories and ended the quarter with inventory levels down approximately 10% from a year ago.”

Any renewed strategy will fall to a new Pier 1 CEO after Christmas. Analysts have expressed concern about the retailer's ability to withstand intense competitive pressures, noting that while the housing market is improving, consumers enjoy a growing number of home furnishing options both offline and on the web.