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Pier 1 Reduces Planned Store Closures by 75

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First Starbucks backed off closing some stores and now Pier 1 is doing the same. The home decor company lowered its number of store closings in its 2009 fiscal year to 50 down from its original plan to close 125. It has closed 31 to date and will close 19 next January and February. (Our previous number had been 80, in part because we're going by the calendar year. I've adjusted the math below to reflect 31 closures in 2009.)

That came as part of the firm's second quarter results, where it also reported a smaller loss than the same quarter of last year. It also beat analyst estimates.

The home decor company lost $15.8 million, or 17 cents per share, for the period ended Aug. 29 compared with a loss of $30.2 million, or 34 cents per share, a year earlier.

Analysts predicted a loss of 22 cents per share, according to a Thomson Reuters poll. Analysts' estimates generally exclude one-time items.

Operating costs and expenses declined to $302 million from $348.9 million, while inventories were $43 million less than a year ago.

Sales fell 11 percent to $286.7 million from $320.5 million, but beat Wall Street's estimate of $281.9 million.

Sales at stores open at least a year, known as same-store sales, dropped 7.6 percent in the quarter due to declining traffic.

Same-store sales are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.

Pier 1 had 1,061 North American stores at quarter's end. It plans to close about 50 stores during the fiscal year, down from its initial estimate of 125 closings. The company has shuttered 31 stores for the year to date and anticipates closing another 19 locations in January and February.

Bankruptcies and Liquidations:

Potential Bankruptcies & Liquidation Impact: 1,541 confirmed closures out of about 3,385 stores

Announced Closings

Total Closings: up to 2,390 U.S. stores

Potential Impact of All Announcements to Date: 3,931 closures out of up to 5,775 potentially affected U.S. stores

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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