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 In a 2018 presentation to investors, the company acknowledged that shoppers thought its merchandise was outdated and expensive.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

Some Surrey landlords ‘kicking out’ businesses that can’t make rent

Surrey Board of Trade CEO suspects situation will be worse in May

MP Tamara Jansen to donate pay raise to Surrey-based charity

Members of Parliament to receive legislated pay raise Wednesday, April 1

COVID-19: Daily update on the pandemic in Surrey, White Rock and beyond

APRIL 1: Surrey businesses ‘freaking out’ about not being able to make rent

Surrey RCMP not seeing ‘significant loss’ in ranks because of COVID-19

Surrey Mounties say they have a good tracking system to keep tabs on police officers experiencing an illness

Supreme Court upholds White Rock council decision on Lady Alexandra development

Planned 12-storey highrise on lower Johnston Road was stalled in 2018

First Nations, remote communities need special attention in pandemic, Freeland says

Health-care workers, seniors, Indigenous Peoples some of people most at risk, health officials say

B.C. teen donating stem cells for brother’s second fight with cancer

Chilliwack’s Fleming family appealing to the public to look into stem cell donation

High cost, limited coverage for asthma medicine a concern during COVID-19 pandemic

B.C. man says he skips puffs to save money, but others have it worse

B.C. man sick with COVID-19 calls it a ‘horrible disease’

Tim Green says he has ‘extreme coughing fits every hour’ to clear his lungs

Trudeau says Parliament needs to sit to pass expanded COVID-19 benefits

Wage subsidy program has been greatly expanded since it was first approved

UPDATE: Anti-tax group calls for MPs, senators to donate scheduled pay raises to charity

Bill C-30, adopted 15 years ago, mandates the salary and allowance increases each calendar year

Liberals delay release of 75% wage subsidy details, costs: Morneau

Program will provide up to $847 per week for each worker

World COVID-19 update: NATO suspicious of Russian military drills; Cruise ships ordered to stay at sea

Comprehensive update of coronavirus news from around the world for Wednesday, April 1

John Horgan extends B.C.’s state of emergency for COVID-19

Premier urges everyone to follow Dr. Bonnie Henry’s advice

Most Read