The inventories in question were $43 million lower than last year, with a cash balance of $109 million at quarter's end and a total liquidity of $232 million. Store occupancy costs were $135 million, compared to $143 million a year ago. The company reported a net loss of $16 million for the quarter, versus a net loss of $30 million for the same period of last year.

Furthermore, according to Charles H. Turner, executive vice president and chief financial officer, terminations, combined with store closings, will mean more liquidity due to inventory liquidations. The company has closed 31 locations so far this year, and the overall 50 locations targeted is less than the original estimate of 125 stores.

"We're looking at every single store in every single market," Turner commented. "At some point, we would like to say we'll fill in some holes; there are some markets we left that we want to get back into, but right now we're not prepared to talk about that."

Turner went on to say that Pier I would rather work on achieving rental reductions rather than outright lease terminations. "We're appreciative of landlords willing to work with us as we strive for operations of our real estate portfolio," he added.

Pier I president and CEO added his belief that the company was well-positioned for the third quarter, thanks to a low level of inventory clearance and initial mark-ups. Customers, he pointed out, are reacting well to fall merchandise and comparable store sales so far in September are positive.