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Cost Plus to Close 26 Stores and Cut Jobs

The Associated Press

The Oakland, Calif.-based company also plans to exit eight media markets. Cost Plus did not identify those markets or the stores to be closed.

The company will also cut 18% of the staff in its home office and distribution center. Cost Plus had 808 corporate office and distribution employees as of Feb. 2, according to a Securities and Exchange Commission filing. The company had 2,719 full-time and 3,986 part-time employees at the time.

Cost Plus did not disclose how many employees would be affected by the store closures.

The company expects its action to save about $21 million a year starting in fiscal 2009.

Cost Plus also said its same-store sales fell 4.3% in December and 6.6% for the nine-week holiday period ended Jan. 3.

Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance because they measure growth at existing stores rather than newly opened ones.

The company expects to book a fourth-quarter pretax impairment charge of roughly $4 million in fiscal 2008 to write down assets related to the store closures and $2 million in severance costs.

During fiscal 2009, Cost Plus expects to book an additional pretax charge of about $23 million for other costs related to the closures. The company expects to bring in about $19 million in cash receipts from inventory sales at the closing stores.

Feld said the company's cost-cutting actions, combined with previous steps, helps put Cost Plus on a solid footing in terms of liquidity and working capital.

Also Friday, Cost Plus said Michael J. Allen, the company's executive vice president for store operations, has left the company.

Cost Plus operates 296 stores. Its shares fell 3 cents, or 3%, to 98 cents in afternoon trading. The stock has traded between 75 cents and $4.49 during the past 52 weeks.