(Bloomberg)—Pier 1 Imports Inc. said it would seek bankruptcy court approval to wind down its brick-and-mortar operations after the coronavirus pandemic made it difficult for the U.S. retailer to find a buyer.
The company said in a statement Tuesday it intends to sell its inventory and remaining assets, including its intellectual property and e-commerce business, through the court-supervised process. Pier 1 filed to begin an orderly wind-down “as soon as reasonably possible” after stores are able to reopen following government-mandated closures because of the pandemic.
“This decision follows months of working to identify a buyer who would continue to operate our business going forward,” Robert Riesbeck, chief executive officer, said in the statement. “Unfortunately, the challenging retail environment has been significantly compounded by the profound impact of Covid-19, hindering our ability to secure such a buyer.”
Pier 1 sought court protection in February with plans to shut about half of its stores and said it was in talks with multiple potential buyers. The Fort Worth, Texas-based company had posted multiple quarters of declining sales and losses amid a raft of new competitors like Wayfair Inc.
On March 30, it canceled a scheduled auction for its assets, saying lenders would take ownership of the company. However, the company said it was still in discussions with various parties about how to maximize the value of its assets.
Pier 1 is “left with no choice” but to wind down retail operations and look to sell all its remaining assets, attorneys for the company write in court papers. “It is now clear that Pier 1’s future does not involve any brick-and-mortar retail locations,” they said.
Since store-closing sales can’t be held until state-mandated lockdowns are lifted, the retailer is seeking court permission to pay current employees severance and bonuses to discourage them from leaving before the chain can wind down. Pier 1 is also asking its bankruptcy judge to set an auction on July 8 for its its intellectual property and e-commerce business, other court papers show.
Bloomberg News reported last month that Pier 1 was expected to receive a revised purchase offer from a company called CSC Generation that would keep open fewer than 100 of the company’s 900-plus locations. The bid was expected after the retailer’s bankruptcy court process was paused while stores are shuttered in accordance with coronavirus containment measures.
The case is Pier 1 Imports Inc., 20-30805, U.S. Bankruptcy Court, Eastern District of Virginia (Richmond)
--With assistance from Jeremy Hill.
To contact the reporter on this story: Jeff Sutherland in Tokyo at [email protected].
To contact the editors responsible for this story: Rachel Chang at [email protected]
Beth Thomas, Nikolaj Gammeltoft
© 2020 Bloomberg L.P.
