If turning around its fortunes with a merchandise overhaul was Plan A, then
Pier 1 Imports
appears ready to try Plan B.
With its sales still in decline, the home-furnishings chain revealed Thursday that it has signed a confidentiality agreement with an Icelandic retailer who holds a 10% stake in the company about a "possible negotiated transaction."
In a filing with the
Securities and Exchange Commission
, the company said it will make "information available to
Lagerinn ehf concerning the business, financial condition, operations, assets and liabilities."
Lagerinn is owned by Jakup a Dul Jacobsen, whose investment in Pier 1 has supported the stock since it was
announced in February. The European retail magnate franchises Jysk (pronounced yoo-sk) stores, a home furnishings chain that's known as the Danish version of IKEA. Jacobsen's chain has 1,000 stores worldwide, with 23 stores in Canada and two in New Jersey under the name Inspiration.
He previously disclosed a stake in
Linens 'n Things
before it agreed to be acquired by a private equity group. Earlier this year, he struck a deal with Pier 1 to buy its U.K.-based Pier Retail Group for $15 million through a subsidiary.
Investors have speculated that Jacobsen may be interested in acquiring U.S.-based retailing operations at a discount in order to build up his foothold in this country's vibrant consumer market.
Shares of Pier 1 jumped on news of the filing, and recently were up 53 cents, or 7.8%, to $7.33.
Even with Thursday's gains, shares of Pier 1 are down 30% for the year as its sales and earnings have collapsed under competitive pressure from the likes of
. The retailer had promised a turnaround early this year as it rolled out a new product assortment for the spring shopping season, but the effort bore no fruit.
"No assurances can be given that any possible negotiated business transaction involving
Pier 1 will be proposed, or if proposed, consummated," the filing said.