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Retailer News from Goody's, Pier 1

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Some news from around the web.

Forbes provides analysis of the proposed Pier 1 acquisition of Cost Plus.

Analysts speculate that Pier I investors are unhappy the company is taking on more distractions amidst a down housing market that has affected sales across the retail sector, particularly in home-related items. Investors could also be peeved that Pier I is taking resources away from the turn-around promised by chief executive Alex Smith when he took over at the start of 2007.

"Turning around a home-furnishings retailer in the current challenging consumer environment is not easy and places significant demands on managerial resources," Sanford Bernstein analyst Colin McGranahan said in a research note. "Integrating a relatively large acquisition, even as Pier 1 continues to improve on execution that by its own admission has been less than stellar, seems rather daunting."

Meanwhile, Goody's, which operates 335 stores, has filed for Chapter 11 bankruptcy protection. It will close 69 stores.

Knoxville-based Goody's said it was filing a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware, where the company is registered.

The filing comes less than three years after corporate namesake and then chairman-CEO Robert Goodfriend embraced a $327 million buyout by New York investment firms Prentice Capital Management and GMM Capital to take private the chain his father founded as an Athens, Tenn., outlet store in 1953.

Today, Goody's operates 355 stores in 20 states across the South and Midwest. In January, the chain announced layoffs of 25 of its 500 employees at its corporate headquarters in Knoxville.

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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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