The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results. Defendants represented that the Company’s initiatives to grow the business were working, that it was well positioned for growth and that its stock was a “good investment” when it was trading at $22 per share. As a result of defendants’ false statements, CPI stock traded at artificially inflated prices during the Class Period, reaching a high of $31.91 per share on May 12, 2010.

On December 22, 2011, the Company announced its financial results for its third fiscal quarter ended November 12, 2011. The Company reported a net loss of ($7.25) million or ($1.03) diluted earnings per share for the third quarter and that net sales declined 11% to $95.0 million, due in significant part to the Company’s comparable store sales declines. The results also meant that CPI had failed its leverage ratio test for its revolving credit facility. CPI had to obtain an amendment to its credit agreement. As a result, CPI will have to stop its dividend. On this news, CPI stock collapsed $3.30 per share to close at $1.98 per share on December 22, 2011, a one-day decline of nearly 63%.

According to the complaint, the true facts, which were known by defendants but concealed from the investing public during the Class Period, were as follows: (a) CPI’s business was performing much worse than defendants acknowledged and was deteriorating; (b) CPI’s initiatives to grow the business were not working at the levels represented by defendants; (c) CPI’s stock was not a “good investment” and the Company’s stock buy-back was intended solely to project false confidence in the Company’s prospects; and (d) CPI’s cash flows would continue to deteriorate due to poor revenue growth such that CPI’s capital structure was not as strong as defendants represented.

If you are a member of the class, you may request no later than March 13, 2012, that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members.

The Law Offices of Marc S. Henzel has not filed a lawsuit against the defendants.  If you currently own shares of CPI Corp. and/or purchased shares during the class period and would like to learn more about any potential claims or you wish to discuss these matters and have any questions concerning this announcement or your rights, please contact Marc S. Henzel (610) 660-8000, Mhenzel@Henzellaw.com, or to sign up online, visit the firms website at www.henzellaw.com

Attorney advertising. © 2012 Law Offices of Marc S. Henzel.  The law firm responsible for this advertisement is the Law Offices of Marc S. Henzel.  Prior results do not guarantee or predict a similar outcome with respect to any future matter.

Contact:

Law Offices of Marc S. Henzel

Marc S. Henzel

Email: Mhenzel@Henzellaw.com

Phone 610-660-8000