Cargo Arrives at Pier

The deal to sell Cargo Furniture, from Tandycrafts Inc. to Pier 1 Imports, Inc. (both of Fort Worth, Texas), has been completed, for initial proceeds of approximately $3.4 million. Tandycrafts said it will use theproceeds from the sale to pay down debt.

One of the terms of the deal, announced earlier this month, has Tandycrafts president and coo James Allen resigning to accept a post with the new Cargo subsidiary of Pier 1. Also making the move will be Lisa Thornton, who will serve as executive vp of merchandising and marketing. She had been with Cargo for 15 years, serving as president for the past three and leading all of the company's merchandising, marketing and store operations.

Cargo Furniture is a 22-store chain specializing in children's furniture. Its stores are typically located in strip centers, average 4000 square feet and feature furniture and home decor accessories merchandised in a vignette format.

“We are acquiring a company that gives us a vehicle for expanding into the under-served but rapidly growing children's furniture market,” Pier 1 chairman and ceo Marvin Girouard said. “We look forward to refining the Cargo concept, applying our merchandising and marketing expertise and rolling it out nationwide to become a 200 to 300 store chain over the next decade.”

Pier 1 Imports is already North America's largest specialty retailer of imported decorative home furnishings and gifts, with more than 850 stores in 48 states, Puerto Rico, Canada, the U.K., Japan and Mexico.

The deal will effectively take Tandycrafts out of the retailing business, allowing it to concentrate on the manufacture and sale of frames, framed art and mirrors. (It is the nation's second-largest maker and marketer of frames and wall decor under its Pinnacle Art & Frame brand.) Last year, it had sold its J-Mar gift unit, Sav-On Office Supplies chain and Tandy Leather Direct unit (which sold leather and leathercrafting products online and through mail order). Even after using the proceeds of this sale to reduce its debt, the company will be left with an outstanding balance of more than $30 million under its revolving credit facility.