After a long struggle to improve operations and financial performance, resulting in a Chapter 11 filing, Pier 1 Imports has filed a motion seeking bankruptcy court approval to begin an orderly wind-down of the company’s retail operations after store locations are able to reopen following COVID-19-related closures.
As part of the wind-down, the company intends to sell off inventory and remaining assets, including its intellectual property and e-commerce business. It will initiate store closing efforts and liquidation sales once store locations can reopen in compliance with COVID-19 guidelines from local government and health officials. The company continues serving customers through Pier1.com currently, with orders being processed and filled.
Pier 1 noted that it expects to conduct asset sales in accord with bidding procedures established by the bankruptcy court. The company has proposed July 1 as the asset bid deadline, July 8 as the auction date and July 15 as the sale hearing date. Pier 1 added that its debtor-in-possession lenders have agreed to allow it to overdraw the DIP facility by $40 million to support the company’s continued operations through the wind-down period.
Pier 1 maintained that it engaged in a thorough analysis of all available strategic alternatives together with the company’s financial and legal advisors prior to deciding on pursuing a liquidation process. However, due to the combination of a challenging retail environment and the uncertainty of a post-COVID world, Pier 1 and its advisors determined that an orderly wind-down is the best way to maximize the value of company assets.
Robert Riesbeck, Pier 1’s CEO and CFO, said, “We are grateful to our dedicated and hardworking associates, millions of customers and committed vendors who have collectively supported Pier 1 for decades. We deeply value our associates, customers, business partners and the communities in which we operate, and this is not the outcome we expected or hoped to achieve. 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.”