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Pier 1 cuts staff, reviewing 125 locations

-- Home Textiles Today, 1/27/2009 3:49:00 PM

Fort Worth, Texas – Stressed specialty retailer Pier 1 Imports today announced real estate and workforce measures that could affect up to 125 stores and 10% of its associates.

The 1,100-store chain has engaged an outside firm, DJM Realty, to assist in completing landlord negotiations by the end of May 2009 – of which Pier 1 said: “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.”

Pier 1 will cease operations at its company-owned 514,000 square-foot distribution center in St. Charles, Ill.

The retailer will also cut about 10% of its “full time equivalent positions in its distribution center, home office, and field administration areas,” Pier 1 said.

From these measures, Pier 1 sees costs of approximately $5 million for severance, outplacement and other charges, and said it will “also incur one time charges related to store closings, should rental reduction negotiations be unsuccessful.”

“The cash portion of these one-time charges will be partially offset by cash proceeds from the liquidation of inventory in closing stores,” Pier 1 stated.

Overall, Pier 1 expects future operating results to benefit from “reduced payroll expense and operational improvements resulting from the store and distribution center closings.”

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