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Pier 1 implements cost-reduction plans


FORT WORTH, Texas Pier 1 Imports reported that it 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.

Pier 1 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% of the company’s full time equivalent positions in its distribution center, home office, and field administration areas.

Pier 1 said it 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.

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