Home goods retailer Pier 1 Imports Inc. said Monday that it has filed for bankruptcy protection and plans to close all Canadian stores as part of the restructuring. The Fort Worth, Texas-based company, which was founded in 1962, has been struggling with increased competition from budget-friendly online retailers such as Wayfair. This June 15, 2005, file photo shows a Pier 1 Imports store in Dallas. THE CANADIAN PRESS/AP-Donna McWilliam

Pier 1 files for bankruptcy protection amid online challenge

Pier 1 said it will pursue a sale, with a March 23 deadline to submit bids

Pier 1 Imports Inc. — the once-trendy supplier of home goods like papasan chairs and throw pillows — filed for bankruptcy protection Monday after years of sliding sales.

The Fort Worth, Texas-based company has been struggling with increased competition from budget-friendly online retailers like Wayfair and Amazon and discount stores like Home Goods. In a 2018 presentation to investors, the company acknowledged that shoppers thought its merchandise was outdated and expensive. It was also burdened by high sourcing and supply chain costs.

Pier 1 said it will pursue a sale, with a March 23 deadline to submit bids. A hearing is scheduled for Tuesday at the U.S. Bankruptcy Court for the Eastern District of Virginia.

In the meantime, Pier 1 said lenders have committed approximately $256 million in debtor-in-possession financing so it can continue its operations during the Chapter 11 proceedings.

“Today’s actions are intended to provide Pier 1 with additional time and financial flexibility as we now work to unlock additional value for our stakeholders through a sale of the company,” Pier 1 CEO and Chief Financial Officer Robert Riesbeck said in a statement. Riesbeck, an executive with previous corporate turnarounds, joined Pier 1 last summer.

Ted Gavin, a retail bankruptcy expert and managing partner of the consulting firm Gavin/Solmonese, said he hasn’t shopped at Pier 1 in more than a decade.

“People have been talking about Pier 1 heading for bankruptcy for a few years now. They’ve closed stores, they’ve struggled to find a steady customer base, they’ve struggled with falling sales,” Gavin said.

Pier 1 was founded in 1962 in California, where it made its name selling incense, beanbag chairs and love beads. The company moved to Texas in 1966 and went public in 1970.

But in recent years, it struggled to draw customers to its often cramped and cluttered stores. The company has been trying to streamline its merchandise, improve online sales and draw in younger customers, but it was an uphill climb. On Monday, Pier 1 was selling a tufted velvet armchair for a sale price of $399 on its website. Target was offering a similar one for $214.

In its most recent fiscal year, which ended in February 2019, Pier 1 reported sales of $1.55 billion. That was down 18% from 2015. Pier 1’s sales tumbled 13% to $358 million in its most recent quarter, which ended Nov. 30.

Last month, Pier 1 announced it would close 450 stores, including all of its stores in Canada. The company is also closing two distribution centres. Pier 1 wouldn’t say how many jobs will be affected.

Pier 1’s shares have fallen 45% since the start of the year. They closed at $3.58 per share on Friday.

READ MORE: Canadian consumer, business insolvency filings grew by 9% in 2019, report finds

Dee-Ann Durbin, The Associated Press


Like us on Facebook and follow us on Twitter.

Bankruptcies

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Blue ribbons popping up along streets in Abbotsford in praise of B.C. healthcare workers

Healthcare worker’s family starts local trend of morale support

Abbotsford Agrifair’s 2020 event still in the works

Fair will respect COVID-19 health directives, but continuing plans in hope ban will be lifted

Learning after spring break: more details from Abbotsford School District’s superintendent

Parents to receive call from teachers next week, asked to conduct survey to tailor learning needs

Abbotsford’s Mandarin Garden Buffet offering free food to those in need

Chinese food restaurant providing free fried rice or chow mein to those struggling during pandemic

Man sentenced for setting apartment barbecue on fire in Abbotsford

Michael Rodden climbed to second-storey balcony in March 2019

B.C. is seeing the highest rate of COVID-19 recovery in Canada, and there’s a few reasons why

British Columbia was one of the first to see rise in COVID-19 cases, and has also switched up testing

Earth Hour 2020 kicks off online Saturday night

Action moves online due to COVID-19

B.C. COVID-19 cases rise 92 to 884, one more death, 81 in care

Outbreak action underway in 12 long-term care homes

B.C. veterinarians want to smooth the fur of COVID-19-worried pet owners

Vets expect to continue giving your fur buddies the help they need while social distancing

B.C. VIEWS: Small businesses need our help

Just as integral in neighbourhoods in Vancouver and Surrey as they are in Prince George or Kelowna

‘Tremendous’ response from blood donors has supply keeping pace with demand

About 400,000 of Canada’s 37 million residents give blood on a regular basis

Morning world update: Cases surge past 600,000; positive news in Germany

Spain suffers its deadliest day as Germany considers April 20 to possibly loosen restrictions

Most Read