Pier 1 to shut more stores in expanded turnaround
Pier 1 Imports Inc. is planning a significant increase in store closings as the distressed home-furnishings chain seeks to cut costs and revive operations.
The company expects to announce the new round of shutdowns when it reports results for its third fiscal quarter next week, according to people with knowledge of the plan. The company aims to restructure out of court, in part by closing stores and using the savings to boost liquidity, said the people.
Filing for bankruptcy is an option under consideration if Pier 1 falls short of its goals, said the people, who asked not to be identified because the process isn’t public yet. The company also expects to disclose cuts in its debt load, listed at more than $300 million in its previous quarterly report.
Representatives for Fort Worth, Texas-based Pier 1 declined to comment. The shares fell more than 5%.
Pier 1 posted eight straight quarters of declining sales and six consecutive quarterly losses as shoppers defected to new e-commerce players like Wayfair Inc. and conventional giants like Walmart Inc. that have expanded in the category. Turnaround specialist Robert Riesbeck took over as chief executive officer in November, almost a year after Pier 1 replaced a previous CEO and said it would explore strategic alternatives.
The company is working with a team of advisers to restructure operations, including Kirkland & Ellis LLP, AlixPartners LLP and Guggenheim Partners LLC. Representatives from those firms declined to comment.
Pier 1 lost $199 million in its last fiscal year on $1.55 billion in sales. During its September earnings call, the company said it would close about 70 stores in fiscal 2020, and that the number likely would increase as talks with landlords progressed. Pier 1 had more than 950 outlets in the U.S. and Canada as of Nov. 4, with 4,000 employees as of March 2019.