Dive Brief:

• Pier 1 on Wednesday reported a disappointing fourth quarter, when net sales fell 3.1% to $512.2 million, even with $27.5 million that came in during an extra 14th week, while same-store sales, on a 13-week basis, fell 7.5%. E-commerce penetration rose to some 25%, according to a company press release.

• For its full fiscal year, net sales fell 1.6% to $1.8 billion, same-store sales (on a 52-week basis) fell 2% and e-commerce sales exceeded $450 million, with sales penetration reaching 26%, according to a company press release. Last year, Pier 1 put in place a new executive leadership team, which has developed a three-year strategic plan now in its initial phase.

• The next day the company unveiled those plans, which are based on research ordered up when CEO Alasdair James arrived a year ago. With the imperative to drive topline growth, plans are to revamp its supply chain, clean up stores and better target marketing to the company's best demographics, executives said at the company's April 19 investors day.

Dive Insight:

There's a lot of consumer energy — and dollars — flowing to furniture and home goods retailers, so Pier 1's trouble "falls squarely on the shoulders of Pier 1," according to GlobalData Retail Managing Director Neil Saunders.

While the retailer's e-commerce sales are rising (which can partly explain some of the big decline in same-store sales), the location and condition of its stores are helping keep some customers away, Saunders warned in an email to Retail Dive. Some are located in areas where it's difficult to get healthy footfall on a good day, he said. "This is not something Pier 1 can completely remedy on its own, although it has tried with initiatives like in-store events," he said, adding that ultimately that could mean more store closures.

But the stores, no matter where they are, also need much more work, he said. "Pier 1 has some nice pieces, often at good price points, but these can be hard to find. Meanwhile, categories like furniture need more space if they are to be showcased properly," he said. "In short, stores are not terrible; but neither are they inspiring enough to drive visitation."

Executives on Thursday, admitting that their own research found that "the store shopping environment feels overwhelming," sought to assure investors that they're on the case, and provided photos of current stores in contrast to new layouts and merchandising that the company is implementing now. More stores will soon have clearer shelving and signage and more vignettes demonstrating how various rooms can be pulled together.

Stores remain important to Pier 1, even as furniture sales increasingly move online, but some of the company's popular merchandise is being copied by rivals and offered at lower prices, according to a conference call transcript from Seeking Alpha.

Saunders says that the plans unveiled Thursday are encouraging, but warned that Pier 1 has much to improve upon.

"While the market is growing, so too is competition," he said. "As much as it is true that Pier 1's aesthetic used to make it distinct, others are now replicating this — at least in parts of their offers. Wayfair and TJX are among them. To survive, Pier 1 needs to stand for something different and work to educate consumers about its uniqueness."