Pier 1’s ‘awful day’ arrives with judge approving liquidation
The end is near for Pier 1 Imports Inc.
The home goods retailer, which was in bankruptcy before Covid-19 locked down the U.S. economy, won permission from a federal judge Friday to liquidate its remaining stores. It expects to wrap up going-out-of-business sales in October, a lengthier-than-usual process given state restrictions on store openings.
“No one is a winner today – we failed a lot of people,” said Josh Sussberg of Kirkland & Ellis, the firm representing Pier 1 in bankruptcy court. “It’s frankly an awful day for Pier 1 that nobody wanted.”
Pier 1 entered Chapter 11 bankruptcy earlier this year with hopes of closing some stores, shedding debt and selling the whole business. The pandemic dashed those hopes and will ultimately lead to the loss of some 17,000 jobs across the country.
The retailer reopened 245 stores in the past week and will open its remaining locations when possible to conduct additional going-out-of-business sales, Sussberg said. The chain continued online operations during the pandemic, selling $20 million worth of goods during some weeks, Chief Executive Officer Robert Riesbeck said in the hearing.
An auction for Pier 1’s intellectual property, for which the chain has received “robust interest,” is slated for July 8, Emily Geier of Kirkland & Ellis said. Pier 1 intends to pay its June rent and catch up on back rent – it skipped April and May payments – in September, she said.
“This is not a day for congratulations by any stretch,” Sussberg said, calling Covid-19 the “knockout blow” for Pier 1. “At the end of the day, sharing in the pain is the best we can do.”
Pending a final court order, customers will be able to redeem gift cards online for about the next 30 days, and each Pier 1 store will accept gift cards for 30 days after they reopen, Geier said.
The case is Pier 1 Imports Inc., 20-30805, U.S. Bankruptcy Court, Eastern District of Virginia (Richmond)