Pier 1 Imports Started as a Single Store in San

question 58

Essay

Pier 1 Imports started as a single store in San Mateo, California, offering low-priced beanbags, love beads, and incense to baby boomers. Today it sells quality home furnishings and decorative accessories. Why is Pier 1 Imports a perfect case study of the wheel-of-retailing hypothesis?

---

Definitions:

Debt-to-Assets Ratio

A metric showing the proportion of a company's total assets financed through debt, providing insight into the company's financial leverage.

Flotation Costs

The costs associated with issuing new securities, including underwriting fees, legal fees, and registration fees.

After-Tax Cash Inflows

After-tax cash inflows represent the net cash a company receives from its operations, investments, or financial activities, after all taxes have been deducted.

Flotation Cost

The total costs a company incurs when it issues new securities, including underwriting fees, legal fees, and registration fees.