We keep an eye out for companies that are truly struggling and may be headed for disaster. Stocks on are watch list are typically losing money, filing for bankruptcy or fighting to survive. We urge investors to do their homework when a company reaches this stage. Pier 1 Imports is a retailer falling into this category.
When the furnishings and décor store Pier 1 Imports went public in 1972, it doubled its sales each year for four consecutive years. A former hangout for the hippie scene, Pier 1 emerged as the place to get affordable home decorations and knickknacks. However, competition from Ikea, Walmart, and Amazon stalled the company’s growth, leading to a downgrade in its credit rating. This, coupled with the ongoing tariff war with China, has forced the company to rethink its sourcing and procurement supply chains.
Rating: Smells Like Trouble
