Pier 1 Imports, Inc. Tuesday announced that it has filed a motion seeking Bankruptcy Court approval to begin an orderly wind-down of its retail operations as soon as reasonably possible after store locations are able to reopen following the government-mandated closures during the COVID-19 pandemic, the company said in a press release.
As part of the wind-down, Pier 1 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. 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,” Pier 1’s Chief Executive Officer and Chief Financial Officer Robert Riesbeck said.
Together with its financial and legal advisors, Pier 1 engaged in a thorough 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 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 February 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 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.