CPI Outlines Key Elements of Strategic Growth Plan
June 24 2009 - 12:08PM
PR Newswire (US)
Highlights Accomplishments of Current Board and Management Since
2004 ST. LOUIS, June 24 /PRNewswire-FirstCall/ -- CPI Corp.
(NYSE:CPY) today outlined key elements of the strategic growth plan
that is being executed by CPI's board of directors and management
team. The Company's strategic plan is addressing industry and
economic challenges through a focus on operational efficiency,
customer service, and cash generation while developing new avenues
for profitable growth. The plan includes: -- Upgrading the store
environment, visual merchandising, and in-store promotion; --
Driving additional gains in studio sales and labor productivity and
the key customer indicators; and -- Pursuing avenues for profitable
growth that leverage existing resources to tap new demographic and
service categories, including: -- Mobile initiative -- Online
marketing / eCommerce -- Digital fulfillment for third parties
Since 2004, CPI's board and management team have implemented a
two-phased program to successfully navigate a range of industry and
company-specific challenges and position the business for success.
As a result, CPI today is the category leader with unparalleled
geographic coverage, digital capabilities and economies of scale.
CPI is also experiencing expanding margins, improved earnings and
cash flow, and there is strong momentum on key customer indicators.
Key successes of the board's two-phased program include: Phase 1:
Successful Turnaround of Sears Portrait Studio (2004-2006) --
Developed and executed a groundbreaking digital transition
strategy; -- Jettisoned diversionary and loss-making ventures and
sharpened focus on the core Sears business; -- Upgraded the range
of products and services offered and improved value proposition; --
Established a more accountable, performance-oriented culture with a
closer alignment of interests of employees with those of
shareholders; -- Instituted new performance-management and selling
systems across the organization; and -- Overhauled marketing
programs - introduced analytical customer segmentation and offer
cadence strategies. As a result of these Phase 1 actions, the
company reversed severe sales declines and drove large gains in
operating margins, earnings and cash flow. Phase 2: Transition of
PictureMe Portrait Studios and Implementation of System-Wide
Performance Improvements (2007-2009) -- Completed acquisition of
PictureMe Portrait Studio(R) operations out of bankruptcy in June
2007; -- Successfully integrated and digitally converted
approximately 2,000 studios in the U.S., Canada and Mexico; --
Extended CPI's cost leadership through the generation of $30
million in annualized cost savings; -- Upgraded product and service
offerings and improved selling capabilities driving significant
increases in average sale; -- Drove significant improvement in a
range of customer indicators (including average sale, satisfaction
and loyalty); -- Improved our performance management systems and
expanded our organizational capabilities in key areas including
field management; and -- Strengthened relationships with CPI's
retail hosts, Sears and Walmart, and executed a new six year
agreement with Sears. As a result of these Phase 2 actions, the
Company increased average sale by approximately 33% in PictureMe
Portrait Studios and realized $30 million in annualized cost
savings for fiscal 2009. CPI will hold its 2009 Annual Meeting of
Stockholders to be held on July 8, 2009. CPI's board of directors
recommends that stockholders vote FOR the Company's
highly-qualified, experienced nominees - James Abel, Paul
Finkelstein, Michael Glazer, Michael Koeneke, David Meyer and
Turner White - by telephone, Internet or by signing, dating and
returning the WHITE proxy card today. Earlier today, the Company
filed an investor presentation with the Securities and Exchange
Commission ("SEC"). The presentation is also available under the
"investor" section of the Company's website at:
http://www.cpicorp.com/ and at the SEC's website at
http://www.sec.gov/. If you have any questions, require assistance
with voting your WHITE proxy card, or need additional copies of the
proxy materials, please contact: MacKenzie Partners, Inc. 105
Madison Avenue New York, NY 10016 (212) 929-5500 (Call Collect) Or
TOLL-FREE (800) 322-2885 Important Information CPI Corp. has filed
a definitive Proxy Statement with the Securities and Exchange
Commission ("SEC") and has furnished to its stockholders a Proxy
Statement in connection with the solicitation of proxies for the
2009 Annual Meeting of Stockholders. The Company advises its
stockholders to read the Proxy Statement relating to the 2009
Annual Meeting because it contains important information.
Stockholders may obtain a free copy of the Proxy Statement and
other documents that CPI files with the SEC at the SEC's website at
http://www.sec.gov/. The Proxy Statement and these other documents
may also be obtained for free from CPI by directing a request to
CPI Corp., 1706 Washington Avenue, St. Louis, Missouri 63103-1717,
Attn: Corporate Secretary, calling (314) 231-1575, or by contacting
MacKenzie Partners, Inc., by toll-free telephone at 800-322-2885 or
by e-mail at . Certain Information Concerning Participants CPI
Corp. and its directors and executive officers (other than Peter
Feld) may be deemed to be participants in the solicitation of
proxies from stockholders in connection with the Company's 2009
Annual Meeting. Information concerning persons who may be
considered participants in the solicitation of the Company's
stockholders under the rules of the SEC is set forth in public
filings by the Company with the SEC, including the proxy statement
relating to the 2009 Annual Meeting of Stockholders.
Forward-Looking Statements The statements contained herein that are
not historical facts are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
and involve risks and uncertainties. The Company identifies
forward-looking statements by using words such as "preliminary,"
"plan," "expect," "looking ahead," "anticipate," "estimate,"
"believe," "should," "intend" and other similar expressions.
Management wishes to caution the reader that these forward-looking
statements, such as the Company's outlook for portrait studios, net
income, future cash requirements, cost savings, compliance with
debt covenants, valuation allowances, reserves for charges and
impairments and capital expenditures, are only predictions or
expectations; actual events or results may differ materially as a
result of risks facing the Company. Such risks include, but are not
limited to: the Company's dependence on Sears and Walmart, the
approval of the Company's business practices and operations by
Sears and Walmart, the termination, breach, limitation or increase
of the Company's expenses by Sears under the license agreements, or
Walmart under the lease and license agreements, customer demand for
the Company's products and services, the economic recession and
resulting decrease in consumer spending, compliance with the NYSE
listing requirements, manufacturing interruptions, dependence on
certain suppliers, competition, dependence on key personnel,
fluctuations in operating results, a significant increase in piracy
of the Company's photographs, widespread equipment failure,
compliance with debt covenants, high level of indebtedness,
implementation of marketing and operating strategies, outcome of
litigation and other claims, impact of declines in global equity
markets to pension plans and impact of foreign currency
translation. The risks described above do not include events that
the Company does not currently anticipate or that it currently
deems immaterial, which may also affect its results of operations
and financial condition. The Company undertakes no obligation to
update or revise publicly any forward-looking statements, whether
as a result of new information, future events or otherwise. About
CPI Corp. CPI Corp. has been dedicated to helping families
conveniently create cherished photography portrait keepsakes that
capture a lifetime of memories for more than 60 years. CPI Corp.
provides portrait photography services in approximately 3,000
locations, principally in Sears and Walmart stores. As the first in
the category to convert to a fully digital format, CPI Corp.
studios offer unique posing options, creative photography
selections, a wide variety of sizes and an unparalleled assortment
of enhancements to customize each portrait - all for an affordable
price. CPI Corp. is based in St. Louis and traded on the New York
Stock Exchange (ticker: CPY). Contact: Matthew Sherman / Eric
Brielmann Joele Frank, Wilkinson Brimmer Katcher (212) 355-4449
DATASOURCE: CPI Corp. CONTACT: Matthew Sherman or Eric Brielmann,
Joele Frank, Wilkinson Brimmer Katcher, +1-212-355-4449, for CPI
Corp. Web Site: http://www.cpicorp.com/
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