NEW YORK (CNNMoney.com) -- Shares of troubled home furnishing retailer Pier 1 jumped close to 10 percent Thursday after the company disclosed it was in talks with a European investment company with retail holdings.

In a regulatory filing Pier 1 said it has entered into a possible "negotiated business transaction" with European firm Lagerinn ehf, owned by Danish investor Jakup a Dul Jacobsen.

Pier 1 did not disclose specifics of the deal talks. Jacobsen already owns 9.9 percent of Pier 1's (Charts) stock and recently purchased all of Pier 1's overseas business.

However last month, Pier 1 Imports agreed to sell its private-label credit card operations to JP Morgan Chase & Co. for about $155 million and said it is exploring other strategic alternatives for its business.

In its filing with the Securities and Exchange Commission (SEC). Pier 1 said it had "entered into a confidentiality agreement" with Lagerinn ehf and that Lagerinn has contacted and held discussions with members of Pier 1's management.

Pier 1 has struggled to grow its sales for close to two years amid increasing competition from value-priced discounters like Wal-Mart (Charts) and Target (Charts) who have recently their expanded their offerings in the home furnishings space.

Pier 1 did not immediately return calls for comment.

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