PIR Pier 1 Imports Inc

By Ezequiel Minaya 

Hedge fund firm Alden Global Capital LLC revealed a 9.5% stake in home-goods retailer Pier 1 Imports Inc., which is searching for a new CEO amid disappointing sales.

In a regulatory filing, Alden said it has been in contact with Pier 1 management regarding shareholder representation to the board, the company's recent financial results and the search for a new chief executive. Alden said it intends to continue the communication and that it believes that Pier 1 is "at a critical juncture."

Alden said it obtained the stake, composed of some 7.9 million shares outstanding, because it believed the stock was "undervalued and represented an attractive investment opportunity." The stake places Alden second only to T. Rowe Price Associates Inc. among institutional investors in Pier 1, according to FactSet data.

In a statement, Pier 1 said it values "constructive input from investors, " including Alden Global, and would continue to engage in the "dialogue" with shareholders. A call requesting further comment wasn't immediately returned.

Shares of Pier 1, which have fallen 57% over the past 12 months, rose 6.8% after hours to $4.83.

Earlier this month, Pier 1 said that Chief Executive Alex Smith was slated to leave the company at the end of the year, and a search for his replacement had been launched. The announcement came on the same day that the chain reported disappointing preliminary results for the quarter ended in August. It said net sales retreated about 6.7% from the same period a year ago, with comparable sales falling 4.3%, much more than the company's forecast of a range of a 1% loss and a 1% climb, respectively. Analysts cited by FactSet expected comparable sales to fall 0.4%.

The company has said it expects per-share earnings of between 5 cents and 6 cents, excluding costs linked to the departure of Mr. Smith.

Retailers across the spectrum have been grappling with dwindling store traffic as consumers increasingly do their shopping online. While Pier 1 and others have moved to beef up their e-commerce capabilities, they also have to contend with Amazon.com's growing popularity.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

(END) Dow Jones Newswires

September 19, 2016 20:18 ET (00:18 GMT)

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