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 In a 2018 presentation to investors, the company acknowledged that shoppers thought its merchandise was outdated and expensive.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

Royal Athletic Park will not be a shelter site during COVID-19 crisis: Victoria mayor

Indoor sites to be coordinated with Island Health, BC Housing

BC Ferries further reduces sailings in response to COVID-19

Any sailing reservations cancelled due to schedule changes will be refunded

COVID-19: Saanich company joins nation-wide effort to produce 30,000 ventilators

StarFish Medical using a ‘purpose-driven design for rapid manufacturing,’ CEO says

Judge rejects pandemic as reason to grant bail to immunocompromised prisoner

Esquimalt man told there are more health risks for addicts on the street than there are in jail

Canoe found in men’s public bathroom in Cadboro-Gyro Park

‘Please do not park your canoe in our bathrooms,’ say Saanich parks staff

UPDATE: Canadians awake to extra COVID-19 emergency benefit money, feds clarify changes

The CRA and federal officials are working to clarify the confusion around payments

B.C. sorting medical equipment sales, donation offers for COVID-19

Supply hub has call out for masks, gowns, coronavirus swabs

B.C. records five more deaths due to COVID-19, 45 new cases

A total of 838 people have recovered from the virus

Major crimes investigating sudden death of North Okanagan child

The 8 year old was flown to Kelowna General Hospital and died hours later

Easter Bunny added to B.C.’s list of essential workers

Premier John Horgan authorizes bunny to spread “eggs-ellent cheer” throughout province

Travellers returning to B.C. must have self-isolation plan or face quarantine: Horgan

Premier John Horgan says forms must be filled out by travellers

More than 400 animals have been adopted amid pandemic: B.C. SPCA

People are taking this time of social distancing to find a loyal companion through the animal welfare group

VIDEO: More than 85 people displaced by Campbell River apartment fire

Traffic is being diverted around Dogwood Street and 9th Avenue

Thieves steal $5,000 worth of cigarettes and candy from semi trailer in Nanaimo

Culprits hit truckload in shipping company storage yard on Old Victoria Road on Monday

Most Read