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Comparable Store Sales For Pier One Drop 11.7 Percent

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Pier 1 Imports, Inc. reported that comparable store sales for the five-week period ended October 4, 2008 declined 11.7 percent, primarily the result of a decline in traffic during the month of September of 8 percent. Alex W. Smith, the Company's President and Chief Executive Officer, said, "Given the unprecedented events in the financial markets over the past few weeks, we wanted to provide additional information concerning our performance. As we previously indicated, our ability to improve our profitability for the rest of the fiscal year would be contingent on driving traffic levels that were at least neutral to last year. Clearly, growing consumer concerns and the effects of extreme weather took a toll on our September sales results. If we continue to experience traffic levels like those seen in recent weeks, we will not meet the current consensus for earnings expectations for the back half of the fiscal year. "Despite the sharp decline in traffic in September, our underlying business remained strong. We continued to experience strong conversion rates and were able to achieve merchandise margin rates in September that were in line with our expectations. In terms of liquidity, as of the end of August, we had over $191 million in cash and short term investments and had $117 million in availability on our line of credit. "As we head into the holiday season, we are confident that our diligent efforts to cut costs and improve efficiencies, coupled with our strong balance sheet, have us well-positioned to address the challenges presented during this period of consumer uncertainty and well into the future. We will continue to focus on balancing profitable sales, merchandise margin dollars and inventory levels, and will adjust our tactics as necessary to meet the changing sales trends throughout the rest of the fiscal year." Pier 1 Imports, Inc. is the original global importer and is North America's largest specialty retailer of imported decorative home furnishings and gifts. Information about the Company is available on www.pier1.com.

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