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The Bombay Company (BBAO) logoPier 1 Imports (NYSE: PIR) can take some comfort in the fact that it's not the only once-proud home furnishing store that is struggling.

In fact, for now, they're doing a lot better than Bombay Co. (OTCBB: BBAO), which, after 20 years of operation, has filed for bankruptcy. The company plans to keep its roughly 380 stores open while it looks for a buyer, and will also pay its workers and suppliers, and continue to provide employee benefits.

Regardless of what the outcome is for Bombay, this is a pretty powerful indicator of the effect of mass merchandisers on smaller specialty stores. With stores like Wal-Mart (NYSE: WMT) and Target (NYSE: TGT) offering similar-looking decor at a much better price, these stores have had trouble with sales, and margins have also suffered as they look to compete.

The story of Bombay as an investment would appear to be over. What about Pier 1? If it's going to achieve a different fate, it will find some way to become more unique.

Bombay Co. files for bankruptcy: The Wal-Mart Effect? originally appeared on BloggingStocks on Fri, 21 Sep 2007 11:19:00 EST. Please see our terms for use of feeds.

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