Struggling home furnishings retailer Pier 1 Imports, Inc. said it filed for Chapter 11 bankruptcy protection as it is initiating a sale process. The company is in discussions with multiple potential buyers.
In a statement, the company said it has also entered into a Plan Support Agreement or PSA with a majority of its term loan lenders. The Chapter 11 proceedings in the U.S. Bankruptcy Court for the Eastern District of Virginia is expected to facilitate an orderly sale process and implement the PSA.
The deadline to submit qualified binding bids will be on or around March 23, subject to procedures to be approved by the court.
The omni-channel retailer also intends to use the bankruptcy process to complete its previously announced closure of up to 450 store locations. It was in early January that the loss making retailer announced its plans to close the stores, including all its stores in Canada.
Pier 1 now said it has closed or initiated going-out-business sales at over 400 locations till date. The company is also in the process of closing two distribution centers to reflect its revised store footprint.
Pier 1 is also commencing proceedings in Canada in connection with its plans to close all its stores in Canada.
The company further said it has received a commitment of approximately $256 million in debtor-in-possession financing from Bank of America N.A., Wells Fargo National Association, and Pathlight Capital LP.
Following court approval, this financing, together with cash flows from operations, would provide ample liquidity to support continued operations and the sale process. Pier 1 said its stores and online platform are open and operating through the process.
Pier 1, which opened in 1962 with a single store, currently sells products through approximately 930 Pier 1 stores in the U.S. and online at pier1.com. The company has been reporting loss and weak comparable sales for many quarters.
Slowing foot traffic amid the ever-increasing online competition from industry majors and the changing consumer habits has forced many retailers to close their stores and seek bankruptcy protection in recent times.
Department store chain Macy’s in early February announced its plan to close 125 stores over the next three years as it struggles to boost its sales. Bed Bath & Beyond, Schurman Retail Group and Express, Inc. also recently announced store closures.
Struggling department store chain Sears, which emerged from Chapter 11 bankruptcy, recently announced more store closures.
New York-based grocery chain Fairway Market also has filed for Chapter 11 bankruptcy protection.
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