Pier 1 Imports has filed for Chapter 11 bankruptcy and will pursue a sale of the company. The retailer will maintain its plans to close up to 450 locations, including all stores in Canada, and will shutter two distribution centers due to its smaller footprint.
Pier 1 will undergo a court-supervised sales process, with the deadline for qualified bids on March 23, 2020. The retailer also is planning to commence bankruptcy proceedings in Canada.
The remaining stores and Pier 1’s e-Commerce business will remain open during the bankruptcy process. Bank of America, Wells Fargo and Pathlight Capital provided $256 million in debtor-in-possession financing to help ensure the retailer’s continued operation.
“In recent months, we have taken significant steps forward in our business transformation and cost-reduction initiatives,” said Robert Riesbeck, CEO and CFO of Pier 1 in a statement. “We have worked to establish an appropriately sized and profitable store footprint, operating structure and merchandise assortment that will enable Pier 1 to better serve our customers across store and online channels. Today’s actions are intended to provide Pier 1 with additional time and financial flexibility as we now work to unlock additional value for our stakeholders through a sale of the company.”
Pier 1 has been struggling for some time: the company’s stock fell 40% over the 12 months leading up to September 2019. The retailer also faced delisting from the New York Stock Exchange (NYSE) twice before accepting an 18-month compliance plan in November 2019 designed to have the company conform with continued listing standards.
The retailer’s Q3 2019 results were bleak, with comparable sales down 11.4% and net sales down 13.3% alongside a net income loss of $59 million. The news contributed to a further 17% drop in share prices when the results were released on January 7.