Pier 1 Imports has decided to liquidate after being unable to find a buyer.
The struggling home goods retailer, which filed for bankruptcy protection in February, filed a motion seeking court approval to begin an orderly wind-down of its retail operations as soon as possible after its stores are able to reopen following closures during the COVID-19 pandemic.
As part of the wind-down, Pier 1 plans to sell its inventory and remaining assets, including its intellectual property and e-commerce business, through the court-supervised process. The retailer, which operates some 541 stores, said that its debtor-in-possession lenders have agreed to allow the company to overdraw its DIP facility by roughly $40 million to support its efforts to liquidate.
“This is not the outcome we expected or hoped to achieve,” said Robert Riesbeck, Pier 1’s CEO and CFO. “This decision follows months of working to identify a buyer who would continue to operate our business going forward. Unfortunately, the challenging retail environment has been significantly compounded by the profound impact of COVID-19, hindering our ability to secure such a buyer and requiring us to wind down.”
Pier 1’s bankruptcy filing was not unexpected and followed nine consecutive quarters of sales declines amid increased competition from the likes of Wayfair and Amazon, off-pricers such as Home Goods and traditional retailers, notably Walmart and Target, which have both expanded their home décor offerings. Sales in Pier 1’s most recent quarter fell 13% to $358 million as store traffic dropped. The company also reported a net loss of $59 million for the quarter, which ended Nov. 30.
Pier 1 has proposed July 1, 2020 as the asset bid deadline, July 8, 2020 as the auction date and July 15, 2020 as the sale hearing date.