Home decor and furniture retailer Pier 1 Imports Inc (PIR) said on Monday it plans to close up to almost half of its 900 stores, cut jobs and warned about its ability to continue as a going concern in a tough retail environment. The retailer's shares, which were trading around $500 in 2013, plunged to about $5 late last year. They were down nearly 5% in extended trading.
This is a case study that shows how investing in a No-Moat business can be a risky proposition. Retail industry is generally a low margin business but shifting trends and increased competition due to eCommerce (AMZN) have made it very difficult to turn a profit.
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