Pier 1 Files For Bankruptcy After Last-Ditch Effort To Cut Costs Fails
Another retailer has failed in the “greatest economy ever,” as more than 12,000 stores closed in 2019, and mall vacancy rates across the country hit 8-year highs.
Home decor and furniture retailer Pier 1 Imports closed 450 out of 942 stores last month, a last-ditch effort to save itself from collapse. Fast forward one month, the retailer has filed for Chapter 11 bankruptcy and has prepared for a sale.
The retailer has struggled to adapt to an evolving retail market with new dominance seen by e-commerce giants Amazon and Wayfair. A weakening consumer base with insurmountable debts has weighed on home goods purchases.
Pier 1 CEO and CFO Robert Riesbeck said in a statement released on Monday that the decision to file for Chapter 11 will give the company “time and financial flexibility” to prepare the company for a sale.
“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,” Riesbeck said.
Pier 1 intends to have a “court-supervised sale process and complete the sale through a Chapter 11 plan” by March 23.
Pier 1 listed assets and liabilities of about $500 million and has secured $256 million of debtor-in-possession financing from Bank of America Corp., Wells Fargo & Co., and Pathlight Capital LP.
The retail apocalypse is expected to gain momentum in 2020 as mall vacancy rates are already at 8-year highs. Last year, retailers shuttered a record number of stores, nearly 12,000 by 4Q.