The company has undergone severe measures to continueoperations, including the closing of 79 stores in 2007, and a planto close about 20-25 stores this year, leaving the retailer withjust more than 1,000 stores in the US and about 80 in Canada. Thefirm also cut 70 full-time positions in distribution centers and onJune 9 completed the sale of its headquarters facility toChesapeake Energy Corp. for about $100 million. The company signeda lease for seven years for 250,000 sf, but have a caveat thatallows early termination after five years.

Alex Smith, president and CEO, said during the call that thateven though times are tough, turnaround progress should still bemade, albeit slower. "We must continue to work on the appeal of ourmerchandise assortments and the quality of our in-store experienceso that conversion rates, units per transaction and average ticketcontinue to move upward."

He's also trying to put a positive face on the rejection by CostPlus in its offer to issue 0.6 of its shares for every share ofCost Plus, or about $81 million. "We believe that our proposal isfull and fair and we remain committed to working directly with theCost Plus shareholders to make this transaction a reality," Smithsaid during the call. Pier 1 shares opened at $5.42 per share andclosed at $5.01 per share on Thursday, while Cost Plus sharesopened at $3.50 and closed at $3.29.