Alden Global Reports 9.5% Stake in Pier 1
September 19 2016 - 6:58PM
Dow Jones News
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.
Pier 1 didn't immediately respond to a request for comment.
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 18:43 ET (22:43 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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