Pier 1 to wind down business operations, permanently close stores
May 21, 2020 11:23AM
By David Dykes
By David Dykes
Fort Worth, TX-based Pier 1 Imports, Inc. (OTCPK: PIRRQ) said it has 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 its stores reopen following the government-mandated closures during the Covid-19 pandemic.
The company said it intends to sell its inventory and remaining assets, including its intellectual property and e-commerce business, through the court-supervised process.
Pier 1 has stores in South Carolina, and the company said it will permanently shut down its retail operations.
Pier 1 said it intends to initiate store closings and liquidation sales once store locations can reopen, in compliance with Covid-19 guidelines from local government and health officials. The company said it is continuing to serve customers through Pier1.com, and orders are being processed and filled.
“We are grateful to our dedicated and hardworking associates, millions of customers and committed vendors who have collectively supported Pier 1 for decades," said Robert Riesbeck, Pier 1’s chief executive officer and chief financial officer. "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 said it engaged in a "thorough analysis" of all available alternatives before making its decision.
Ultimately, due to the combination of a challenging retail environment and the new reality and uncertainty of a post-Covid 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, company officials said.
Pier 1 expects to conduct its asset sales according to 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 (“DIP”) lenders 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 said it is negotiating the terms of a term sheet with the DIP lenders, the ad hoc group of term lenders and the creditors’ committee regarding 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.
Additional information regarding the company’s court-supervised process is available at https://dm.epiq11.com/Pier1, or by calling the company’s claims agent, Epiq Corporate Restructuring LLC, at (866) 977-0883 (or +1 (503) 520-4412 for international calls) or sending an email to firstname.lastname@example.org.
Kirkland & Ellis LLP and Osler, Hoskin & Harcourt LLP are serving as legal advisors to Pier 1 in the U.S. and Canada, respectively. AlixPartners LLP is serving as the company’s restructuring advisor and Guggenheim Securities, LLC is serving as the company’s investment banker.
Founded with a single store in 1962, Pier 1 Imports is an omni-channel retailer of home décor and accessories. The company’s products have been available through approximately 541 Pier 1 stores in the U.S. and online at pier1.com.