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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
For the fiscal year ended February 4, 1995
COMMISSION FILE NUMBER 1-10204
------------------------------
CPI CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 43-1256674
(State of Incorporation) (I.R.S. Employer
Identification No.)
1706 WASHINGTON AVENUE
ST. LOUIS, MISSOURI 63103-1790
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (314) 231-1575
-------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- ------------------------------ -----------------------
Common Stock $.40 par value New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL
REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR
SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH
REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR
THE PAST 90 DAYS.
YES __X__ NO _____.
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS
PURSUANT TO ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND
WILL NOT BE CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN
DEFINITIVE PROXY OR INFORMATION STATEMENTS INCORPORATED BY
REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K.
YES _____ NO __X__.
Aggregate market value of the Registrant's voting stock held by
non-affiliates, based upon the closing price of said stock on the
New York Stock Exchange - Composite Transaction Listing on
May 2, 1995 ($17.000 per share): $224,699,013.
As of May 2, 1995, 13,862,985 shares of the Common Stock,
$0.40 par value, of the Registrant were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the Annual Report to Shareholders for the year ended
February 4, 1995, are incorporated by reference into Parts I, II
and IV of this Report.
Portions of the Proxy Statement relating to the Annual Meeting
of Shareholders to be held June 13, 1995, are incorporated by
reference into Part III of this Report.
TABLE OF CONTENTS
PART I
- ------
Item 1. Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
PART II
- -------
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 8. Financial Statements and Supplementary Data
Item 9. Disagreements on Accounting and Financial Disclosure
PART III
- --------
Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Item 13. Certain Relationships and Related Transactions
PART IV
- -------
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
Signatures
ITEM I. BUSINESS
THE COMPANY
- -----------
CPI Corp. is a holding company engaged, through its
subsidiaries, in developing and marketing consumer services and
related products through a network of centrally-managed, small
retail locations. The Company operates professional portrait
studios, photographic finishing laboratories, electronic publishing
stores and wall decor locations.
The Company started up its photo finishing business in 1982.
On August 19, 1991, the Company acquired Fox Photo, Inc., and on
December 1, 1992, the Company purchased the operational assets of
Pemtom, Inc., a Minneapolis-based company operating under the name
Proex. At February 4, 1995, the Company operated 660 photo-
finishing locations under the names of CPI Photo Finish, Fox Photo
and Proex.
On May 30, 1993, CPI Corp. entered the wall decor business
with the acquisition of Ridgedale Prints Plus, Inc. ("Prints Plus")
from the Melville Corporation. Prints Plus is a posters, prints
and custom framing retail chain with 120 stores located in malls
throughout the United States.
For the fiscal year ended February 4, 1995, approximately 52%
of net sales and 86% of operating earnings (before deduction of
general corporate expenses, net interest income (expense), other
income and income tax expense) were derived from the Sears Portrait
Studio business. The Company has operated portrait studios as a
Sears Roebuck and Company ("Sears") licensee since 1961, when it
was one of more than 15 Sears portrait photography licensees.
Today, the Company is the only operator of Sears Portrait Studios
in the United States, Canada and Puerto Rico. The Company is
materially dependent upon the continued goodwill of Sears and the
integrity of the Sears name in the retail marketplace. The Company
believes that its relationship with Sears is excellent and that it
has been beneficial to both companies. See "Business-Relationship
With Sears."
The executive office is located at 1706 Washington Avenue, St.
Louis, Missouri, 63103-1790, and its telephone number is (314) 231-
1575. Unless the context otherwise requires, references herein to
the "Company" or "CPI Corp." mean CPI Corp., its consolidated
subsidiaries and their predecessor companies.
RELATIONSHIP WITH SEARS
- -----------------------
The Company operates its Sears Portrait Studio business under
a license agreement. The agreement is terminable by either the
Company or Sears with respect to any or all studios upon 90-days
notice. Early in 1993, Sears announced plans to close 113 stores,
which included 38 Sears stores with portrait studios. The Company
has relocated some of these studios to new sites in the same market
areas. Except in connection with store closings, Sears has never
terminated the operation of any Company studio under any license
agreement. The relationship with Sears is long-standing and the
Company has no reason to believe that Sears will exercise its
rights under the agreement to reduce materially the scope of the
Company's business with Sears.
The Company and Sears entered into its current license
agreement for fixed location studios as of January 1, 1994. This
agreement expires on December 31, 1998. The agreement provides
that the Company pay Sears a license fee of 15% of total annual net
sales for studios located in a Sears store. Net sales are defined
as gross sales less customer returns, allowances and sales taxes.
The Company provides all studio furniture, equipment and fixtures,
conducts advertising at its own expense, and is responsible for
hiring, training and compensating the Company employees and must
indemnify Sears against all said employee claims.
The Company's freestanding studios in retail malls that
operate under the Sears name pay a license fee of 7.5% of total
annual net sales per studio and benefit from advertising under the
Sears name.
All of the Company's Canadian studios operate under an April
6, 1977, nonexclusive license agreement with Sears Canada, Inc.,
which is a subsidiary of Sears. The agreement renews automatically
on a year-to-year basis but is terminable by either party on 60
days' notice. The license fee is 15% of net sales. The Company
provides all studio furniture, equipment and fixtures and conducts
all advertising at its own expense.
As a Sears licensee, the Company enjoys the benefits of its
use of the Sears name, Sears' daily cashiering and bookkeeping
system, store security services and customers' ability to use their
Sears credit cards to purchase the Company's products or services,
for which Sears bears the credit risk of authorized credit card
use. The Company is also able to place its portrait studio print
media advertising under the Sears name at rates lower than those
the Company could otherwise obtain.
COMPETITION
- -----------
The Company competes in the portrait photography business with
a number of companies that operate fixed location, traveling and
freestanding photography studios. Independent professional photo-
graphers also compete with the Company in various locations. The
Company believes that its portrait photography products are
competitive in terms of price, quality and convenience of purchase
with similar products of its competitors.
Other national, regional and local companies operate rapid
photographic finishing laboratories that compete in local markets
with the laboratories that the Company is operating. The Company
has identified two principal kinds of competitors - independent
entrepreneur/franchisees who own their minilabs and other major
photofinishers. The Company believes that the quality of its
products enables it to compete successfully and that its marketing
strategy permits effective competition with the other major
photofinishers. The Company enhances the quality of its products
by carefully training and supervising minilab technicians and by
using quality control checks during the photo development and
printing process. While it is felt that the Company competes
successfully in terms of quality, photofinishers who use the
services of a mass production lab are able to finish photographs in
large volume which enables them to sell their photofinishing
services at a lower price. To compete with the other major
photofinishers, the Company has developed a marketing strategy of
locating minilabs in regional retail malls and strip shopping
centers convenient to their target customers, quality-conscious
35mm camera users. In addition, by locating these minilabs in a
number of locations in select metropolitan areas, the Company also
benefits from area-wide marketing and supervision.
The Company competes with numerous national, regional and
local framing retailers serving the wall decor segment of the home
furnishings market. The primary competitors in this business are
franchise locations, small regional chains and many individual
stores which focus on custom framing. Other competitors in this
segment include mass merchants and other specialty home furnishings
stores which offer a fixed selection of pre-framed prints. The
Company believes it competes successfully in this segment by
offering a large selection of prints and frames, fast custom
framing service and very competitive pricing.
The Company's primary competition in the electronic publishing
business is highly fragmented among franchise locations and
numerous individual, owner-operated locations which provide
printing and copy services throughout the United States. The
Company believes it provides efficient, personal service because of
more convenient access to its full range of state-of-the-art
copying equipment.
SUPPLIER RELATIONSHIPS
- ----------------------
The Company purchases photographic paper and film for its
studio and minilab operations primarily from one major
manufacturer. The Company purchases camera, printing, minilab,
reprographic and other equipment and supplies from a number of
suppliers and is not dependent upon any supplier for any specific
kind of equipment. The Company has had no difficulty in the past
obtaining sufficient material to conduct its businesses. The
Company believes that its relations with its suppliers are good.
SEASONALITY
- -----------
The Company's professional portrait photography business is
seasonal, with the largest volume of sales occurring in the third
and fourth fiscal quarters during the periods preceding and
including the Thanksgiving/Christmas season. The photofinishing
business seasonality is reflected in sales increases in the second
quarter of the fiscal year, in the Thanksgiving/Christmas season
and in sales decreases in the first quarter of the fiscal year.
The seasonality of the wall decor business is exhibited by
increased sales in the fourth fiscal quarter as well.
EMPLOYEES
- ---------
At February 4, 1995, the Company had approximately 12,400
employees, of whom approximately 6,100 were part-time. The
Company's employees significantly increase in number during peak
periods and, at December 17, 1994, the Company had approximately
16,500 employees. The Company's employees are not members of any
union and the Company has experienced no work stoppages. The
Company believes that its relations with its employees are good.
ADDITIONAL INFORMATION REQUIRED UNDER THIS ITEM IS CONTAINED IN
THE REGISTRANT'S 1994 ANNUAL REPORT TO SHAREHOLDERS, EXHIBIT 13 OF
THIS FILING, IN THE DISCUSSION OF THE COMPANY'S BUSINESS SEGMENTS
AND KEY OPERATING UNITS.
ITEM 2. PROPERTIES
The following table sets forth certain information concerning
the Company's principal facilities:
Principal Facilities
APPROXIMATE
AREA IN PRIMARY OWNERSHIP
LOCATION SQUARE FEET USES OR LEASE
- ------------------- ------------ ------------------ ----------
St. Louis, Missouri 312,600 Administration and Owned
Photoprocessing
St. Louis, Missouri 79,800 Warehousing Leased (1)
St. Louis, Missouri 44,300 Warehousing Leased (2)
Brampton, Ontario 40,000 Administration, Owned
Warehousing and
Photoprocessing
Las Vegas, Nevada 12,200 Photoprocessing Leased (3)
Thomaston, Connecticut 25,000 Administration and Owned
Photoprocessing
Edina, Minnesota 29,000 Administration, Leased (4)
Warehousing and
Photoprocessing
Concord, California 43,000 Administration, Leased (5)
Warehousing and
Manufacturing
New Castle, Delaware 16,200 Warehousing Leased (6)
(1) Lease term expires on June 30, 1997.
(2) Lease term expires on February 28, 1997.
(3) Lease term expires on July 31, 1996.
(4) Lease term expires on March 30, 1999.
(5) Lease term expires on March 31, 2002.
(6) Lease term expires on December 14, 1995
The Company operates its portrait studios in Sears stores
pursuant to the license agreement with Sears. See "Relationship
with Sears." The Company's other portrait studios, which are
located in shopping centers, are generally leased for at least
three years with some having renewal options. The Company's
minilab locations generally are leased for terms of three to seven
years and some have one or more renewal options. The electronic
publishing locations are generally leased for terms of five to
seven years with one or more renewal options and are commonly
situated in office buildings, multi-use complexes or downtown
locations. The wall decor locations are generally in enclosed
regional malls with lease terms of ten years without renewal
options.
On an ongoing basis, the Company analyzes the use of its
facilities to assure operating economies, effective servicing of
its customers and necessary flexibility to meet present and future
demands of its businesses.
ITEM 3. LEGAL PROCEEDINGS
There are various suits pending against the Company, none of
which is material in nature. It is the opinion of management that
the ultimate liability, if any, resulting from such suits will not
materially affect the consolidated financial position or results of
operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to stockholders for a vote during
the fourth quarter of fiscal year 1994.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Information required under this Item is contained in the
Registrant's 1994 Annual Report to Shareholders, Exhibit 13 of
this filing, in the section titled "Selected Quarterly Financial
Data," and will be contained in the Registrant's 1995 Proxy
Statement, to be dated within 120 days of the end of the
Registrant's fiscal year 1994, and is incorporated herein by
reference.
As of April 17, 1995, the market price of the Registrant's
common stock was $17.625 per share with 13,862,985 shares
outstanding and approximately 2,276 holders of record.
ITEM 6. SELECTED FINANCIAL DATA
Information required under this Item is contained in the
Registrant's 1994 Annual Report to Shareholders, Exhibit 13 of
this filing, in the section titled "Financial Background and
Trends," and is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Information required under this Item is contained in the
Registrant's 1994 Annual Report to Shareholders, Exhibit 13 of
this filing, in the section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations," and
is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required under this Item is contained in the
Registrant's 1994 Annual Report to Shareholders, Exhibit 13 of
this filing, in the sections titled "Consolidated Balance Sheets,"
"Consolidated Statements of Earnings," "Consolidated Statement of
Changes in Stockholders' Equity," "Consolidated Statement of Cash
Flows," "Notes to Consolidated Financial Statements" and
"Selected Quarterly Financial Data," and is incorporated herein
by reference.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not Applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information required under this Item will be contained in the
Registrant's 1995 Proxy Statement, to be dated within 120 days of
the end of the Registrant's fiscal year 1994, and is incorporated
herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
Information required under this Item will be contained in the
Registrant's 1994 Proxy Statement, to be dated within 120 days of
the end of the Registrant's fiscal year 1994, and is incorporated
herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Information required under this Item will be contained in the
Registrant's 1995 Proxy Statement, to be dated within 120 days of
the end of the Registrant's fiscal year 1994, and is incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not Applicable.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a) Index to Certain Documents
(1) Independent Auditor's Reports
These reports are included in this filing under the sections
titled "Independent Auditors' Report" in this Form 10-K and
"Exhibit 13" (under the title "Independent Auditors' Report"
in the Registrant's 1994 Annual Report to Shareholders), and
are incorporated herein by reference.
(2) Financial Statements:
(a) Consolidated Balance Sheets as of as of February 4, 1995
and February 5, 1994
(b) Consolidated Statements of Earnings for the fiscal years
ended February 4, 1995, February 5, 1994 and
February 6, 1993
(c) Consolidated Statements of Changes in Stockholder's
Equity for the fiscal years ended February 4, 1995,
February 5, 1994 and February 6, 1993
(d) Consolidated Statements of Cash Flows for the fiscal
years ended February 4, 1995, February 5, 1994 and
February 6, 1993
Information required under these items is contained in the
Registrant's 1994 Annual Report to Shareholders, Exhibit 13
of this filing, under the sections titled "Consolidated
Balance Sheets," "Consolidated Statement of Earnings,"
"Consolidated Statements of Changes in Stockholders'
Equity," and "Consolidated Statements of Cash Flows," and
is incorporated herein by reference.
(3) Notes to Consolidated Financial Statements
This information is included in the Registrant's 1994 Annual
Report to Shareholders, Exhibit 13 of this filing, under
the section titled "Notes to Consolidated Financial
Statements," and is incorporated herein by reference.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K (Continued)
(4) Financial Statement Schedules
II. Valuation and Qualifying Accounts
This information is included in this filing under the
section titled "Schedule II" in this Form 10-K, and is
incorporated herein by reference.
All other schedules and notes under Regulation S-X are
omitted because they are either not applicable, not
required or the information called for therein appears in
the consolidated financial statements of notes thereto.
(b) Reports on Form 8-K
On December 22, 1994, the Company filed a report on Form 8-K
with an attached press release announcing: a third quarter
increase in sales of 20.7%; a third quarter increase in
earnings per share; the Company does not expect to achieve
most recent full-year earnings projection.
(c) Index to Exhibits
EXHIBIT 3. ARTICLES OF INCORPORATION AND BYLAWS
Information required by this Exhibit 3 is incorporated by reference
to the below listed documents with corresponding filing date and
registration or Commission file numbers where applicable.
REGISTRATION
INFORMATION INCORPORATED DOCUMENT FILING COMMISSION
BY REFERENCE REFERRED TO DATE FILE NO.
- ----------------------------- ------------- -------- -----------
(a) Articles of Incorporation Annual Report 4/30/90 1-10204
on Form 10-K
dated 4/27/90
(b) Bylaws Annual Report 4/30/90 1-10204
on Form 10-K
dated 4/27/90
(c) Amendment to Bylaws Annual Report 5/4/94 1-10204
on Form 10-K
dated 4/6/94
EXHIBIT 4. INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS,
INCLUDING DEBENTURES
Information required by this Exhibit 4 is incorporated by reference
to the below listed documents with corresponding filing date and
registration or Commission file numbers where applicable.
REGISTRATION
INFORMATION INCORPORATED DOCUMENT FILING COMMISSION
BY REFERENCE REFERRED TO DATE FILE NO.
- ----------------------------- ------------- -------- -----------
(a) Articles of Incorporation Annual Report 4/30/90 1-10204
and Bylaws on Form 10-K
dated 4/27/90
(b) Note Agreement for Series Form 10-Q 9/3/93 1-10204
A Senior Notes Due August
31, 2000 and Series B
Notes Due August 31, 2000
(c) Pledge Agreement Form 10-Q 9/3/93 1-10204
(d) Collateral Agency and Form 10-Q 9/3/93 1-10204
Intercreditor Agreement
(e) Series A Senior Note Due Form 10-Q 9/3/93 1-10204
August 31, 2000, No. R-A1
(f) Series B Senior Note Due Form 10-Q 9/3/93 1-10204
August 31, 2000, No. R-B1
(g) Series B Senior Note Due Form 10-Q 9/3/93 1-10204
August 31, 2000, No. R-B2
(h) Revolving Credit Agreement Form 10-Q 9/3/93 1-10204
(i) Revolving Credit Note Form 10-Q 9/3/93 1-10204
(j) CPI Corp. Shareholder Form 8-A 5/2/89 -
Rights Plan
(k) First Amendment to CPI Form 10-Q 9/3/93 1-10204
Corp. Shareholder Rights
Plan
(l) Second Amendment to CPI Annual Report 5/4/94 1-10204
Corp. Shareholder Rights on Form 10-K
Plan dated 4/6/94
EXHIBIT 4. INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS,
INCLUDING DEBENTURES (CONTINUED)
REGISTRATION
INFORMATION INCORPORATED DOCUMENT FILING COMMISSION
BY REFERENCE REFERRED TO DATE FILE NO.
- ----------------------------- ------------- -------- -----------
(m) First Amendment to Form 10-Q 9/2/94 1-10204
Revolving Credit Agreement
dated 6/14/94
(n) Second Amendment to Annual Report 12/22/94 1-10204
Revolving Credit Agreement on Form 10-K
dated 11/9/94 dated 4/6/94
(o) First Amendment to Note Form 10-Q 9/2/94 1-10204
Agreement dated 2/24/94
(p) Second Amendment to Note Form 10-Q 9/2/94 1-10204
Agreement dated 6/14/94
EXHIBIT 10. MATERIAL CONTRACTS
(10.1) Contract with Sears Roebuck and Co.
(10.2) Employment Contract - Alyn V. Essman
(10.3) Employment Contract - Russell H. Isaak
(10.4) Employment Contract - Patrick J. Morris
(10.5) Employment Contract - David E. April
(10.6) Employment Contract - Barry C. Arthur
(10.7) Employment Contract - Jane E. Nelson
(10.8) Employment Contract - Fran Scheper
Additional information required by this Exhibit 10 is incorporated
by reference to the below listed documents with corresponding
filing date and registration or Commission file numbers where
applicable.
EXHIBIT 10. MATERIAL CONTRACTS (CONTINUED)
REGISTRATION
INFORMATION INCORPORATED DOCUMENT FILING COMMISSION
BY REFERENCE REFERRED TO DATE FILE NO.
- ----------------------------- ------------- -------- -----------
(a) CPI Corp. 1981 Stock Annual Report 5/5/93 1-10204
Bonus Plan (As Amended on Form 10-K,
and Restated on 2/3/91) dated 4/30/93
(b) Deferred Compensation Annual Report 5/1/92 1-10204
and Stock Appreciation on Form 10-K,
Rights dated 4/24/92
(c) Employment Termination Annual Report 5/1/92 1-10204
Agreement - S. Coovert on Form 10-K,
dated 4/24/92
(d) CPI Corp. Restricted Annual Report 5/1/92 1-10204
Stock Plan on Form 10-K,
dated 4/24/92
(e) Deferred Compensation Annual Report 5/1/92 1-10204
and Retirement Plan for on Form 10-K,
Non-Management Directors dated 4/24/92
(f) CPI Corp. Stock Option Form S-8 7/28/92 33-50082
Plan (As Amended and
Restated effective 2/2/92)
(g) Registration of Form 8-A 3/21/89 -
Securities on the New
York Stock Exchange
(h) CPI Corp. Shareholder Exhibit to 5/2/89 -
Rights Plan Form 8-A
(i) CPI Voluntary Stock Form D 3/31/93 -
Option Plan
(j) First Amendment to CPI Form 10-Q 9/3/93 1-10204
Corp. Shareholder Rights
Plan
(k) Second Amendment to CPI Annual Report 5/4/94 1-10204
Corp. Shareholder Rights on Form 10-K
Plan dated 4/6/94
EXHIBIT 11. COMPUTATION OF EARNINGS PER COMMON SHARE
EXHIBIT 13. 1994 ANNUAL REPORT TO SHAREHOLDERS
EXHIBIT 21. SUBSIDIARIES OF THE REGISTRANT
EXHIBIT 23. INDEPENDENT AUDITORS' CONSENT
EXHIBIT 27. FINANCIAL DATA SCHEDULE
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
CPI CORP.
BY: /s/ Alyn V. Essman
-------------------------
(Alyn V. Essman)
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities indicated.
Signatures of Directors and Principal Officers
Signature Title Date
- ------------------- ------------------------ -------------
/s/ Alyn V. Essman Chairman of the Board, April 6, 1995
- ----------------------- Chief Executive Officer
(Alyn V. Essman) and Director (Principal
Executive Officer)
/s/ Milford Bohm Director April 6, 1995
- -----------------------
(Milford Bohm)
/s/ Mary Ann Krey Director April 6, 1995
- -----------------------
(Mary Ann Krey)
/s/ Lee Liberman Director April 6, 1995
- -----------------------
(Lee Liberman)
/s/ Nicholas L. Reding Director April 6, 1995
- -----------------------
(Nicholas L. Reding)
/s/ Martin Sneider Director April 6, 1995
- -----------------------
(Martin Sneider)
/s/ Robert L. Virgil Director April 6, 1995
- -----------------------
(Robert L. Virgil)
/s/ Russell Isaak President April 6, 1995
- -----------------------
(Russell Isaak)
/s/ Patrick J. Morris Senior Executive April 6, 1995
- ----------------------- Vice President
(Patrick J. Morris)
/s/ David E. April Senior Executive April 6, 1995
- ----------------------- Vice President
(David E. April)
/s/ Barry C. Arthur Vice President and April 6, 1995
- ----------------------- Treasurer (Principal
(Barry C. Arthur) Financial and
Accounting Officer)
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
CPI Corp.:
Under date of April 6, 1995, we reported on the consolidated
balance sheets of CPI Corp. and subsidiaries as of February 4, 1995
and February 5, 1994, and the related consolidated statements of
earnings, changes in stockholders' equity, and cash flows for each
of the fiscal years in the three-year period ended February 4,
1995, as contained in the 1994 annual report to stockholders.
These consolidated financial statements and our report thereon are
incorporated by reference in the annual report on Form 10-K of CPI
Corp. for the 1994 fiscal year. In connection with our audits of
the aforementioned consolidated financial statements, we have also
audited the related financial statement schedule as listed in the
accompanying index. The financial statement schedule is the
responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statement schedule based
on our audits.
In our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.
/s/ KPMG Peat Marwick LLP
- -------------------------
KPMG PEAT MARWICK LLP
St. Louis, Missouri
April 6, 1995
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
CPI CORP. CONSOLIDATED ALLOWANCE FOR UNCOLLECTIBLE RECEIVABLES
FISCAL YEARS ENDED FEBRUARY 4, 1995, FEBRUARY 5, 1994
AND FEBRUARY 6, 1993
FEBRUARY 4, FEBRUARY 5, FEBRUARY 6,
1995 1994 1993
------------ ------------ ------------
Balance at beginning
of year $ 918,346 $ 1,042,101 $ 1,070,092
============ ============ ============
Balance at end
of year $ 1,277,094 $ 918,346 $ 1,042,101
============ ============ ============
The majority of receivable amounts are due from Sears for
amounts collected or to be collected by it, for which Sears assumes
all credit risks.
The receivable balances for which an allowance for
uncollectible receivables is established relate primarily to sales
recorded through use of Company commercial charge accounts for
photofinishing and other products and services.
The majority of the allowance for uncollectible receivables is
computed and adjusted every four weeks based on a predetermined
percentage of the related receivable balances. These percentages
are determined using historical results adjusted for current
economic conditions. As a result, the Company does not record
separate additions or deductions to the allowance for individual
accounts but rather adjusts every four weeks for the net change in
the computed allowance based on gross receivable balances.