Pier 1 Files for Bankruptcy, Looks for Buyer
- Feb 18, 2020
As part of its ongoing sale process, Pier 1 Imports has filed for Chapter 11 bankruptcy, which will allow it to reorganize and regain footing to remain in business. As part of the bankruptcy, Pier 1 will also close as many as 450 locations, which includes all of its stores in Canada, as previously announced. With a smaller store footprint, the company will also close two distribution centers. So far, Pier 1 has already either closed or commenced going-out-of-business sales at more than 400 locations.
However, the remaining Pier 1 stores and its online presence will operate as usual throughout the sale process. The company added it will continue paying its vendors and suppliers for the goods and services provided after the Chapter 11 filing.
To stay afloat, Pier 1 also received $256 million in debtor-in-possession financing from Bank of America N.A., Wells Fargo National Association and Pathlight Capital LP. Combining the financing and the sales from the continued operations, the company expects there to be enough money to support operations and the sale process through the Chapter 11 filing.
Pier 1 is currently in discussion with multiple potential buyers and expects the deadline to submit qualified bids to be around March 23.
The next chapter
Robert Riesbeck, Pier 1’s chief executive officer & chief financial officer, said in prepared remarks that filing for bankruptcy and shuttering locations will give the company more time and flexibility during the sale process. He added in his prepared statement that these cost-reduction initiatives have helped establish a more appropriate and profitable store size for the company.
Pier 1 isn’t the only retailer affected by the burden of brick-and-mortar. In October 2019, fast-fashion chain Forever 21 also pursued Chapter 11 bankruptcy as well as closing up to 178 locations. The downward trend isn’t limited to fast-fashion and home furnishings as Sears filed its Chapter 11 bankruptcy a year earlier.