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Pier 1 Imports Inc. may have one more chance to avoid shuttering the majority of its approximately 900 stores after efforts to sell the business in bankruptcy drew little interest, according to people with knowledge of the process.

Lenders to the home goods company are in talks about taking over the business through a so-called credit bid, said the people, who asked not to be named discussing private negotiations. The only external bid made by a March 23 deadline was for just 50 of the chain’s stores.

With most liquidation sales halted because of the coronavirus, retail lenders have fewer options before them when borrowers collapse. While a bankers and debtholders typically can compare a company’s recovery prospects with the estimated cost of liquidation sales, the latter is impossible to gauge with commerce shut down across the U.S.

The other option, in which creditors swap their debt for ownership of the company, is not particularly attractive as the nation slips into a possible recession, the people said. But with no present option to liquidate, Pier 1’s lenders must take another look at taking equity.

Pier 1 sought court protection last month 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.

The case is Pier 1 Imports Inc., 20-30805, U.S. Bankruptcy Court, Eastern District of Virginia (Richmond)

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