UPDATE 1-Cost Plus to cut jobs, close stores

Jan 9 (Reuters) - U.S.-based home decor retailer Cost Plus Inc (CPWM.O) said it will close 26 stores and reduce its home office and distribution center staff by 18 percent as part of its cost-cutting initiatives amid sluggish economic conditions.

The company, which reported a 4.3 percent fall in December same-store sales, also announced the departure of its executive vice president, store operations, Michael Allen. The operator of Cost Plus World Market stores expects to record a fourth-quarter non-cash pre-tax impairment charge of about $4 million in connection with the store closures and $2 million in severance costs related to the workforce reduction.

During fiscal 2009, the company expects to record an additional pre-tax charge of about $23 million related to the store closures.

Cost Plus, which operates 296 stores in 33 states, expects the restructuring efforts to generate annual savings of about $21 million, beginning in fiscal 2009.

Shares of the company were down 11 cents at 90 cents Friday afternoon on Nasdaq. (Reporting by Dhanya Skariachan in Bangalore; Editing by Deepak Kannan)