Pier 1 Closing Nearly Half its Stores, Reducing Staff, Weighing Bankruptcy

Amid ongoing performance challenges, Pier 1 Imports said it plans to close up to 450 stores, nearly half of its 942 locations, reduce headcount and shutter some distribution centers along with other expense reductions as the company is reportedly weighing bankruptcy.

“Although decisions that impact our associates are never easy, reducing the number of our brick-and-mortar locations is a necessary business decision,” said Pier 1 CEO and CFO Robert Riesbeck in a release. “We thank our team of hard-working associates for their commitment to Pier 1 and to serving our customers.”

The company said it’s using a third-party liquidator to help manage the store closings, and received consent from its lenders to reduce the store footprint, headcount and expenses. A headcount reduction figure was not given, but Bloomberg pegged the figure at 40%.

According to Bloomberg, Pier 1 has drafted a bankruptcy plan and last month told creditors it expects to shrink to a $900 million company, while canceling some orders and has asked about Chapter 11 financing. Pier 1 said there’s “substantial doubt … about the company’s ability to continue as a going concern” in its 10Q filing. It also said cash and equivalents and forecast cash flow “are not expected to be sufficient to meet the company’s obligations that will mature over the next 12 months.”

For the third quarter, Pier 1 reported an 11.4% drop in same-store sales, partly caused by the reduction in holiday season selling days vs. 2018. Net sales decreased 13.3% to $358.4 million, and the overall net loss was $59 million. The company reported $11.1 million in cash and $382 million in debt as of Nov. 30.