Pier 1 withdraws offer to buy Cost Plus

FORT WORTH -- Retailer Pier 1 Imports Inc. said Tuesday that it was withdrawing its offer to buy rival Cost Plus Inc. for $88 million.

Pier 1 said it was unlikely that it would be able to buy the company at a price that would make sense for its shareholders.

The company offered to buy Cost Plus this month in a stock swap transaction. In the proposal, Pier 1 said it would issue 0.6 of a share of its common stock for each share of Cost Plus common stock, implying a value of $4 a share.Last week, Cost Plus' board of directors rejected Pier 1's offer.

Pier 1 shares rose 3 cents to $4.03.

Source: Los Angeles Times

Pier 1 seeks to buy Cost Plus

FORT WORTH, Texas and OAKLAND, Calif. (Jun. 9) Pier 1 Imports is looking to acquire all of the outstanding shares of Cost Plus common stock for $4.00 per share. The company said it sent a letter to Cost Plus detailing the proposal and said it believed the transaction could be finished by the third quarter of 2008.

“We believe that the combination of Pier 1 Imports and Cost Plus is extremely compelling and would create significant value for the stakeholders of both companies,” said Alex Smith, president and ceo. “Given our similar customer bases and broadly similar business models, but distinct market positions, we believe Cost Plus is an excellent fit with Pier 1 Imports. We are confident that combining our two companies would create a stronger and more competitive company that is better positioned for future growth. Furthermore, we believe the combination will result in improvements in Cost Plus’s operating margins and significant synergies, anticipated to come from organizational efficiencies in the supply chain management, shared services, store operations and other general administrative costs. Cost Plus shareholders will enjoy significant benefits from the combination, including improved operational liquidity of the combined company as well as a more active trading market for their shares.

In response to Pier 1's proposal, Cost Plus said it would review the offer, and noted that its shareholders do not need to take any action with regards to this proposal.

Peter J. Solomon Company is acting as financial advisor to Cost Plus and Skadden, Arps, Slate, Meagher & Flom LLP and Wilson, Sonsini, Goodrich & Rosati LLP are acting as legal advisors.

Source: Retailing Today

Pier 1 Slows Closings, Expects Break-Even

FORT WORTH-After reporting a comp-store increase and halving losses, Pier 1 Imports is finished with mass store closings, executives said at the company’s fourth quarter conference call recently. The company will open “a few” new units this year, and close 25 stores, said Charles H. Turner, EVP and CFO.

Last year, the company closed a net 79 stores as it launched a major turnaround effort. By 2010, openings and closings likely will be equal. “Our big store closings are done,” Turner said. “We are looking for opportunities to relocate stores, open new locations and exit underperforming markets.”

Total sales for the fourth quarter declined 7.8% from the previous year to $436.7 million. Comparable store sales increased 2.5%. For the quarter, net income was $13.7 million, versus a net loss of $58.7 million a year ago.

For the fiscal year, total sales declined 6.9% from 2007 to $1.5 billion. The company reported a net loss from continuing operations of $96 million, compared with a loss of $227.2 million the previous year. The retailer operates more than 1,100 stores in 49 US states, Canada, Puerto Rico and Mexico.

Source: GlobeSt.