Pier 1 Sells Credit Card Business to Chase for $155 million

Pier 1 Imports, Inc. announced today that, through a subsidiary, it has entered into an agreement to sell its private-label credit card operations to Chase. In addition, Pier 1 and Chase will enter into a long-term marketing and servicing agreement. Net cash proceeds at closing are expected to total approximately $155 million. The transaction has been approved by both companies and is expected to close in Pier 1′s fiscal third quarter, subject to regulatory approvals and other customary closing conditions.

Marvin J. Girouard, Pier 1′s Chairman and Chief Executive Officer, commented, “We are very pleased with this strategic partnership with Chase. Pier 1′s successful 18-year proprietary credit card will continue to be an important component of marketing to our most loyal customers, and with this new business alliance, we can offer new competitive credit programs and services to Pier 1′s customers.”

“Chase is thrilled to partner with Pier 1,” said Harry DiSimone, Chase executive vice president and private-label card executive. “Matching Chase’s marketing prowess and sophisticated customer management practices with Pier 1′s loyal customer base will result in an innovative card program that consumers will value, driving incremental sales for Pier 1.”

Pier 1′s portfolio includes receivables of approximately $140 million and almost 1 million active accounts. The Pier 1 Preferred Card will continue to be offered through Chase under the Pier 1 brand.

Under the long-term marketing and servicing agreement, Chase will provide credit and customer service benefits to Pier 1 cardholders and will also offer special financing terms to Pier 1 customers. Pier 1 will receive future ongoing payments based on credit card sales, new account generation and other credit-related activities. Also, the two companies have agreed to work together on various marketing initiatives designed to increase Pier 1′s retail sales, as well as further enhance credit growth and profitability.

Pier 1 Imports, Inc. is represented in this transaction by its financial advisor, JPMorgan and its legal counsel, Winstead Sechrest & Minick P.C.