"We intend to close a significant number of underperforming stores in 2007," Stewart pledged, and officials later said that 75 of Bombay's 441 retail units will be vanquished after 16 stores were shuttered in the fourth quarter of 2006. Operations featuring the Bombay Co. "KIDS" off-shoot are most in jeopardy as 33 of those will be purged, part of a larger program to roll that line back into the main store umbrella.

DJM's charge is to assist Bombay in negotiating lease terminations or restructuring agreements, Stewart explained. The company also referenced a concept of moving certain stores to "off-mall locations … where the existing mall leases cannot be renewed at economic rental rates." As of this week, Bombay operated 195 mall stores, 199 off-mall and 47 outlet locations.

Even while insisting that "both mall and off-mall (formats) are important to our store mix," Stewart took special care to praise the robust Internet activity. After doubling its e-mail database during the past year, Bombay's direct-to-customer combo of catalog and Internet sales jumped from $24.0 million in FY 2005 to $34.6 million in FY 2006. Conversely, same-store brick-and-mortar sales dipped 5.4% last year, from $531.8 million to $498.6 million.