Shares of CPI Corp. (NYSE: CPY) have surged more than 221 percent since the week of December 1st, thanks in large part to a new five-year deal with Sears, which will allow CPY tol continue to operate Sears Portrait Studios for an initial term of six years commencing January 1, 2009.

“Overall the new agreement strengthens the alignment of CPI and Sears for the benefit of our customers and shareholders,” said CPI CEO and President, Renato Cataldo in a statement. “We will enjoy enhanced operating flexibility under the new agreement, allowing us to concentrate our resources on better serving our customers in the times most convenient to them.”

Simultaneous with execution of the new license agreement, CPI also settled certain outstanding issues with Sears arising under the existing license agreement.

Shares of CPY are down about 83 percent since the onset of 2008.