Pier 1 Imports, Inc. (NYSE:PIR) announced its plan to meet the
challenges of the current environment and to position itself for optimum
performance in a post-recession economy. The Company has begun
negotiating with landlords to achieve rental reductions across the
chain. These negotiations may lead to the execution of early termination
agreements for up to 125 underperforming store locations, if rental
reduction negotiations on those locations prove unsuccessful. The
Company has engaged an outside firm, DJM Realty, to assist in completing
these negotiations by the end of May 2009. The Company also announced
plans to cease operations at its company-owned 514,000 square foot
distribution center in St. Charles, Illinois, and to reduce
approximately 10 percent of the Company’s full time equivalent positions
in its distribution center, home office, and field administration areas.
The Company expects to incur costs related to this announcement of
approximately $5 million for severance, outplacement and other charges.
The Company will also incur one time charges related to store closings,
should rental reduction negotiations be unsuccessful. The Company cannot
provide a reasonable estimate of these charges until such time that the
results of negotiations with landlords are more certain. The cash
portion of these one-time charges will be partially offset by cash
proceeds from the liquidation of inventory in closing stores. In total,
the Company expects these activities to benefit future operating
results. The benefits are primarily the result of reduced payroll
expense and operational improvements resulting from the store and
distribution center closings.
Management’s expectations and assumptions regarding future results are
subject to risks, uncertainties and other factors that could cause
actual results to differ materially from the anticipated results or
other expectations expressed in the forward-looking statements included
in this press release. Any forward-looking projections or statements
should be considered in conjunction with the cautionary statements and
risks contained in the Company’s Annual Report on Form 10-K. Refer to
the Company’s most recent SEC filings for any updates concerning these
and other risks and uncertainties that may affect the Company’s
operations and performance. The Company assumes no obligation to update
or revise its forward-looking statements even if experience or future
changes make it clear that any projected results expressed or implied
will not be realized. Pier 1 Imports, Inc. is the original global
importer of imported decorative home furnishings and gifts. Information
about the Company is available on www.pier1.com.
