Profile: CPI Corp. (CPY)

CPI Corp. (CPI) is engaged in the professional portrait photography of young children, individuals and families. CPI is the operator of portrait studios in Wal-Mart Stores and Supercenters in all 50 states in the United States, Canada, Mexico and Puerto Rico. As of February 7, 2009, PictureMe Portrait Studio operated 2,019 studios worldwide, including 1,642 in the United States and Puerto Rico, 259 in Canada and 118 in Mexico. In Canada, CPI operated 110 portrait studios in Sears and 259 studios in Wal-Mart. In Mexico, it operated 118 studios in Wal-Mart. The Company operates a Website, which supports its Sears studio operations. Searsphotos.com serves as a vehicle to archive, share portraits via e-mail (after a portrait session) and order additional portraits and products. During the fiscal year ended February 7, 2009 (fiscal 2008), the Company discontinued its Portrait Gallery and E-Church operations.

The Company’s portrait studio brands offer customers a range of differentiated portrait products, portrait choices, ordering options and service offerings with fully-digital capabilities. A package sitting consists of a fixed number of portraits, all of the same pose. Package customers may buy additional portrait sheets for a fee. A custom sitting consists of portraits purchased by the sheet and allows for a variety of sizes, poses and backgrounds. A collection sitting consists of a predetermined number of portraits bundled together.

The Company’s PictureMe Portrait Studio brand focuses on the sales of packages and portrait collections. Its packages are studio-wide, low-priced advertised introductory offers and provide a volume of portraits with less customization and more limited selections. Its Sears brand focuses on customized portrait solutions. Within Sears studios, the customer is charged a session fee. There are no session fees in its PictureMe Portrait Studio studios.

As of April 10, 2009, all of the Company’s studios, with the exception of 85 Sears Portrait Studios in Canada, were digital. In Sears’ digital studios, customer orders are either printed immediately in the studio and/or high-resolution images are transmitted electronically to one of its processing centers for fulfillment. PictureMe Portrait Studio studios do not offer on-site printing. Its processing centers complete the customer’s orders to their specifications and return them to the studio for pick-up. Orders placed in digital studios are generally available for pick-up within 10 days from the time of order. Orders placed in film studios are delivered in approximately 2.5 weeks.

The Company competes with LifeTouch, Olan Mills and Kiddie Kandids.