Pier 1 Imports to Close Nearly Half its Stores, Bankruptcy Rumors Persist
Pier 1 Imports said yesterday that it intends to close up to 450 locations, or almost half its fleet of 942 stores, as it unexpectedly reported quarterly earnings amid bankruptcy rumors. Pier 1′s losses have been mounting as its sales decline. And this latest quarter was no exception. Its third-quarter loss widened from a year ago, as same-store sales declined 11.4 percent. The home furnishings retailer said it also plans to shutter certain distribution centers and reduce its corporate expenses, which includes slashing its corporate headcount. Pier 1 has been on many analysts’ bankruptcy watch lists, with its weakening financial situation and large debt load.
Total Retail's Take: Pier 1 Imports has now posted sales declines for nine consecutive quarters. Like many other traditional brick-and-mortar retailers, it has seen its store traffic decline, losing market share in its category to online players such as Wayfair and Amazon.com. In addition to its financial struggles, Pier 1 is dealing with transition within its leadership ranks. In November, Robert Riesbeck was named CEO, replacing Cheryl Bachelder, who had been serving as interim CEO since December 2018. Riesbeck had been Pier 1′s CFO since July 2019. As CEO, Riesbeck had to make the difficult but necessary decision to reduce the company's store count. Pier 1 couldn't continue to operate stores that were losing money. The cost savings from closing 400-plus stores will help boost the company's balance sheet, and can potentially be re-invested into the business to strengthen its remaining stores while also bolstering Pier 1's e-commerce business.