Pier 1 Imports Files for Bankruptcy, Seeks Buyer
Pier I Imports has filed for Chapter 11 bankruptcy and said it already has the approval of its lenders to pursue a sale of the company. The home furnishings retailer is in the process of closing up to 450 stores, including all of its stores in Canada. Pier 1 has received about $256 million in debtor-in-possession financing from Bank of America, Wells Fargo and Pathlight Capital LP. Pier 1 CEO and Chief Financial Officer Robert Riesbeck said in a statement that filing for bankruptcy protection will give the company more “time and financial flexibility” to get it through to a sale.
Total Retail's Take: After years of trying to turn the business around, Pier 1 executives have succumbed to the fact that that isn't going to happen, and are seeking bankruptcy protection to give them time to find a buyer. How did Pier 1 end up in this position? A confluence of factors, increased online (e.g., Wayfair, Amazon) and offline competition (Walmart, Target, HomeGoods), a failure to grow its e-commerce business quickly enough to regain lost market share, a revolving door at the leadership level, and the burden of store leases, have led to this point. The next developments to keep your eyes on is whether Pier 1 has interested buyers, and if so, will the winning bidder keep Pier 1 stores open (albeit at a reduced footprint).