According to The Associated Press, the home decor industry is the "latest casualty of the ongoing housing and mortgage lending bust".

The purchase of new home furnishings is an easy expenditure for consumers to put off -- if people are anxious about their mortgage, or disheartened that their home isn't appreciating in value like it was a few years ago, that old couch starts to look a lot better.

All of this makes Pier 1 Imports (NYSE: PIR) look like a tough bet. The stock rallied last week on an analyst upgrade, but continues to face sales and margin pressures, in part because of lower-price competitors like Wal-Mart (NYSE: WMT). The company is in the midst of an attempted turnaround but the combination of competitive pressures and an industry-wide slowdown that recently claimed Bombay could be too much for the company to handle.

In the most recent quarter, Pier 1 saw its sales decline 7%, and it's going to be hard to turn that around if the industry as a whole continues to sputter.

In June, I suggested that it might be time for Wal-Mart and Pier 1 to team up. if Pier 1 continues to struggle with sales and profitability, and Wal-Mart continues to struggle to reach the more upscale demographic Target (NYSE: TGT) has nailed, it's something that both parties might want to consider.

In a sign that the company recognizes the need for change, Wal-Mart (NYSE: WMT) has brought in former Kraft (NYSE: KFT) executive Linda Hefner to try to turnaround its home decor business, which has been sputtering for awhile now. According to Ms. Hefner's biography on the Kraft Foods website, she led "the development of Kraft's corporate business strategy including merger and acquisition activities around the world" and was CEO of Sara Lee's (NYSE: SLE) Underwear, Socks and Latin America Group.

While her track record looks impressive, I have to wonder if this hiring is more of the same that hasn't worked. Rather than bringing in an expert in the home decor business, Wal-Mart has brought in someone with an extensive background in retail but no experience, as far I can tell, in home decor.

Last week, I wondered whether Wal-Mart should try to team up with Pier 1 Imports. While that might not be realistic, the company's solution to its home decor woes probably doesn't involve an executive with experience selling underwear.