Pier 1 Imports files for bankruptcy

Pier 1 Imports files for bankruptcy

The FINANCIAL -- Once wildly popular company, based in Fort Worth, Texas, released a statement saying that it began Chapter 11 bankruptcy proceedings in Virginia and that it is pursuing a sale of the company.

Pier 1 Imports, the home goods retailer that in the 1990s became a popular destination for exotic rattan chairs and cheap embroidered pillows only to cede its market niche over the last decade to lower-priced competitors, announced on Monday that it had filed for bankruptcy and was pursuing a sale of the company. The retailer has weathered years of declining store revenue and undertook an overly ambitious turnaround plan, industry analysts said. The company said last month that it would close up to 450 of its 936 stores, including all its locations in Canada, according to The New York Times.

Company is trying to make it easier to find a buyer. It announced store closings in January and has shuttered or launched final sales at more than 400 locations. Pier 1 is expecting roughly $256 million from Bank of America, Wells Fargo National Association and Pathlight Capital that will help it maintain operations. Depending on guidelines set by the court, bids by potential buyers should be submitted by around March 23, USA Today reported.

Robert Riesbeck, Pier 1’s Chief Executive Officer and Chief Financial Officer, said, “In recent months, we have taken significant steps forward in our business transformation and cost-reduction initiatives. 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. We are moving ahead in this process with the support of our lenders and are pleased with the initial interest as we engage in discussions with potential buyers,” in a company's  statement.

Its store count peaked at somewhere over 1,000 units, and they were considered tired and poorly located, often near faltering shopping malls. A series of merchandising campaigns were initiated and then cut short as management changes and/or budget restraints prevented them from gaining any traction. The list of strategic buyers could be significantly shorter. It’s difficult to believe new owners could find a merchandising space where a smaller, better-financed Pier 1 could play. In the old days, somebody like Bed Bath & Beyond would have been the logical place to turn, but under its new management, it is looking to shed ill-fitting pieces, not add to its retail mash-up, according to Forbes.

Pier 1’s stores and online platform are open and operating, and the Company remains focused on providing customers with unique, on-trend merchandise and an exceptional shopping experience. The Company expects to operate its business in the normal course during this process, company says.
In 2019, US retailers announced 9,302 store closings, a 59% jump from 2018 and the highest number since Coresight Research began tracking the data in 2012. So far this year, Macy's (M), Papyrus and others have announced store closings. The home goods sector has been hit particularly hard by the rise of Amazon, Wayfair and other online competition. Big-box chains such as Target and Walmart have also strengthened their home goods' offerings, according to CNN.

Author: The FINANCIAL


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