The Wall Street Journalreports that Pier 1 may shut down 125 stores if it can't negotiate rent reductions. The retailer already announced job cuts.
The home-furnishings retailer said it will cut about 10% of the full-time jobs in its distribution center, home office and field administration areas and will close its distribution center in St. Charles, Ill., because of the weak economy.
In addition, Pier 1 is negotiating for rent reductions at all its stores, and it could close 125 underperforming locations if reductions aren't granted.
These actions are expected to result in costs of about $5 million for severance and outplacement, and Pier 1 could post a charge related to store closings if they take place. Those charges would be partly offset by income from liquidation sales.
All these store closings are eventually going to cause big problems for the commercial real estate industry. Pier 1 is smart to try and negotiate for lower rents.
The Wall Street Journal 
