Pier 1 Imports is officially bankrupt, more than a month after the retailer began closing hundreds of stores.
The Texas-based home goods chain, which filed for Chapter 11 bankruptcy Monday in the Eastern District of Virginia, said it intends to use the move to sell the company.
The announcement comes after Pier 1 in January began closing 450 stores, including all of its locations in Canada, after the firm’s fiscal third-quarter sales sank 11.4 percent from the year before.
“We have worked to establish an appropriately sized and profitable store footprint, operating structure and merchandise assortment that will enable Pier 1 to better serve our customers across store and online channels,” Robert Riesbeck, who became CEO in September, said in prepared remarks. “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.”
For some industry watchers, the move does not come as a surprise. S&P Global Ratings last year downgraded the credit rating of the retailer, which had been shuttering stores piecemeal, to CCC- from CCC+.
Pier 1 said it also has a commitment for about $256 million in debtor-in-possession financing from Bank of America, Wells Fargo National Association and Pathlight Capital.
The company’s expected deadline for bids, which has to be approved by a court, is March 23. It said it plans to keep its remaining stores open and website up.
In January, the retailer still had 950 locations. On Monday Pier 1 said it has closed or started to close 400 stores and was looking to sell two distribution centers.
Write to Mary Diduch at [email protected]