Pier 1 files for chapter 11 bankruptcy

Home goods retailer previously announced closure of 450 stores

Home furnishings retailer Pier 1 Imports has filed for chapter 11 bankruptcy in Virginia as it pursues a sale after the 60-year-old brand after it struggled through nine consecutive quarters of falling sales.

The company explained in a press release that it will continue its previously announced closure of 450 stores, including all its stores in Canada. Its online store and remaining stores will stay open through the process.

Pier 1 plans to oversee a court-supervised sale to be completed after the submission of qualified bids by 23 March, subject to procedures approved in court.

CEO and CFO Robert Riesbeck said the company has "today's actions are intended to provide Pier 1 with additional time and financial flexibility as we now work to unlock additional value for our stakeholders through a sale of the company".

The company anticipates $256 million in debtor-in-possession financing from Bank of America, Wells Fargo National Association, and Pathlight Capital LP, which — paired with its cash flow — will "provide ample liquidity to support continued operations and the sale process through the Chapter 11 process".

Its chapter 11 bankruptcy protection filing will allow the company to pay wages, benefits and suppliers while the company restructures its debts.

In January, the company announced a "reduction in corporate headcount" and the closure of nearly half of its stores.

After opening its first store in San Mateo, California in 1962, the company has grown to nearly 1,000 locations worldwide, carrying globally inspired home goods, furniture and accessories.