Pier 1 files for bankruptcy as chain closes hundreds of stores

Pier 1 storefront

Pier 1 Imports Inc. filed for bankruptcy after the retailer of eclectic home furnishings found itself squeezed by online rivals and crushed under too much debt.

The Fort Worth, Texas-based home decor chain also announced it is up for sale.

In the meantime, the company says lenders have committed approximately $256 million in debtor-in-possession financing so it can still operate during the Chapter 11 proceedings.

The company last month announced it would close 450 stores, including all its Canadian locations.

Staff there wouldn't comment, but the store is still open as of today.

Pier 1 expects the deadline to submit qualified bids to be around March 23, impacting chains like Payless, Walgreens, Family Dollar, and Fred's.

"Today's actions are meant 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 CEO Robert Riesbeck said in a press release. Riesbeck, an executive with previous corporate turnarounds, joined Pier 1 last summer.

Following court approval, the company expects that funding, combined with its own cash, to provide enough liquidity to support reduced operations and its sale process.

Pier 1 is closing all of its stores in Canada, and is also closing two distributions centers to reflects its shrinking footprint. He assumed that post in November and is also the company's chief financial officer.

Pier 1 is far from the only casualty of retail competition and shifting consumer habits. Coresight Research, which released its year-end report on the closing stores, said that 5,844 stores closed in 2018. The company's quarterly revenue fell over 13 percent and it reported a net loss of $59 million.

"Everyone is offering low-priced furniture today imported from Asia or India", said bankruptcy attorney Kenneth Rosen of Lowenstein Sandler.

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