Pier 1 investor suggests closing stores

Pier 1 investor suggests closing stores

	Published : Mon, 09 Apr 2007 17:43 By : Agencies Print this Story

NEW YORK (AP) - A group of Pier 1 Imports Inc. shareholders said Monday it suggested that the home-accessories retailer close 250 to 300 underperforming stores, among other cost-cutting initiatives.

The shareholders, which include Elliott Associates LP, reported beneficial ownership of a 5.5 percent stake, or 4.8 million shares, of the Fort Worth, Texas-based company.

In an April 9 letter to the Pier 1 board, Elliott Associates said the company has are acted at a glacial pace' to intensified competition in the home furnishing retail industry.

The shareholder suggested the company reduce its corporate and divisional selling, general and administrative expenses, lease at least a third of its corporate headquarters and add new independent directors, in addition to closing stores.

The shareholder said the company must lower its store count to reduce 'over-saturation' and 'cannibalization.'

'We encourage Pier 1 to present a turnaround plan to the company's owners as soon as possible,' Elliott said. The shareholder added it may meet with management and other shareholder as well as propose other initiatives.

In March, Pier 1 said it would cut 175 positions, over half of them at its Fort Worth headquarters, as part of an effort to make the company leaner and more efficient.

Pier 1 has been struggling with declining same-store sales -- or sales at locations open at least one year -- an important gauge of a retailer's performance. The company has attempted a variety of fixes including bargain pricing, contemporary furniture and added marketing, but none have resulted in a turnaround.

In May, the company hired financial advisers to help it consider options, including selling its credit card business or other assets. Pier 1 sold its private-label credit card operations to Chase for $155 million in late November.

Pier 1 Imports rose 8 cents to $7.60 in midday trading on the New York Stock Exchange. The stock has lost 52 percent over the past two years, but is up 26 percent year-to-date.