Total second-quarter sales were $344.6 million. That represents a 7%-decline from $370.7 million in the same quarter of 2006. Store occupancy expenses for the quarter ended this Sept. 1 were down $2.5 million from second-quarter 2006. Other expenses dropped more dramatically and were $35.6 million less than the year-ago quarter. Chief among the contributors were savings of about $14 million in marketing costs and $13.9 million in payroll.

Trimming costs is key to the turnaround effort, and, during a conference call, management said it estimates savings of "at least $100 million for the year." It expects on-going annual savings of $150 million as it improves efficiency and simplifies all aspects of its organizational structure.

Re-merchandising the mix is equally important, especially in light of "the impact of the macro environment on home retailers," said Alex W. Smith, president and CEO, during a conference call. He said he does not expect the Federal Reserve Board's September cut in interest rates will (positively) impact Pier 1's business.