Pier 1 Imports filed a motion seeking bankruptcy court approval to begin an orderly wind-down of the company’s retail operations as soon as reasonably possible after store locations are able to reopen following the government-mandated closures during the COVID-19 pandemic. As part of the wind-down, the company intends to sell its inventory and remaining assets, including its intellectual property and e-commerce business, through the court-supervised process.
“We are grateful to our dedicated and hardworking associates, millions of customers and committed vendors who have collectively supported Pier 1 for decades,” Robert Riesbeck, CEO and CFO of Pier 1 Imports, said. “We deeply value our associates, customers, business partners and the communities in which we operate, and this is not the outcome we expected or hoped to achieve. This decision follows months of working to identify a buyer who would continue to operate our business going forward. Unfortunately, the challenging retail environment has been significantly compounded by the profound impact of COVID-19, hindering our ability to secure such a buyer and requiring us to wind down.”
Together with its financial and legal advisors, Pier 1 engaged in an analysis of all available alternatives prior to deciding on this course of action. Ultimately, due to the combination of a challenging retail environment and the new reality and uncertainty of a post-COVID-19 world, the company and its advisors determined that an orderly wind-down is the best way to maximize the value of Pier 1’s assets.
Pier 1 intends to initiate store closing efforts and liquidation sales once store locations can reopen, in compliance with COVID-19 guidelines from local government and health officials. The company is currently continuing to serve customers through Pier1.com, and orders are being processed and filled.
Pier 1 expects to conduct its asset sales pursuant to the bidding procedures established by the court on Feb. 18, 2020. The company has proposed July 1, 2020 as the asset bid deadline, July 8, 2020 as the auction date and July 15, 2020 as the sale hearing date.
The company’s debtor-in-possession lenders, including Bank of America and Pathlight Capital, have agreed to allow Pier 1 to overdraw the DIP facility by approximately $40 million to support the company’s continued operations through the wind-down period. Pier 1 is negotiating the terms of a term sheet with the DIP lenders, the ad hoc group of term lenders and the creditors’ committee with respect to the wind-down. The company plans to file a Chapter 11 plan and disclosure statement to bring closure to all parties in the Chapter 11 cases.
Kirkland & Ellis and Osler and Hoskin & Harcourt are serving as legal advisors to Pier 1 in the U.S. and Canada, respectively. AlixPartners is serving as the company’s restructuring advisor and Guggenheim Securities is serving as the company’s investment banker.
Founded with a single store in 1962, Pier 1 Imports is an omni-channel retailer of unique home décor and accessories.