Pier 1 files for bankruptcy protection, closing all Canadian stores

 

TORONTO -- Home goods retailer Pier 1 Imports Inc. says it has filed for bankruptcy protection in the United States and plans to close all Canadian stores as part of its restructuring process.

The Texas-based company has been struggling with increased competition from budget-friendly online retailers such as Wayfair.

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

The company last month announced it would close 450 stores, including all its Canadian locations.

Pier 1's Canadian website now directs customers to a short statement announcing the closures and thanks them for their loyalty.

The company is also commencing creditor protection proceedings in Canada.

Osler, Hoskin & Harcourt LLP are serving as Canadian legal advisers. 

In a statement Monday, the company said it will continue to shutter stores as part of its bankruptcy proceedings. The company, which was founded in 1962, is also closing two distribution centres.

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.

Pier 1's sales fell 13% to $358 million in its most recent quarter, which ended Nov. 30. It reported a net loss of $59 million for the quarter as it struggled to draw customers to its stores. Pier 1 has been trying to declutter its stores, improve online sales and draw in younger customers.

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

This report by The Canadian Press was first published Feb. 17, 2020.

--With files from The Associated Press

The Canadian Press

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