The rise in online shopping was already causing retailers to struggle, and the current world situation has made this even worse for many. Pier 1 Imports joins the seemingly ever-growing list of retailers who have been forced to close recently.

Pier 1’s Situation

Pier 1 initially filed for its bankruptcy protection in February, before the United States was primarily affected by the pandemic. Pier 1 Imports planned to permanently close 450 shops, or about half its locations, and get a buyer for the rest.

Pier 1 Imports released a press release in mid-May that it is going to the bankruptcy court to get approval to wind down its business. Previously, Pier 1 Imports was looking for a buyer for the business, but it was unable to do so due to the current pandemic. The retailer worked for months, trying to find a buyer for the business that would continue operations.

Pier 1 searched for other alternatives to closing its stores, via analysis conducted by legal and financial advisors. Unfortunately, the uncertainty of the retail space after COVID-19, combined with the already-challenging nature of retail, led the company to determine that this was the best choice.

The Future of Pier 1 Imports

According to its press release, Pier 1 will sell its remaining assets, including its inventory, online operations, and intellectual property. As soon as stores can open again, the retailer will begin winding down its business, which involves liquidating its stock.

Currently, Pier1.com is still open and functional, with orders being processed as well as filled. The company will continue its asset sales under the bidding procedures the Court established in February. Pier 1 proposed July 1, 2020 to be the bid deadline for assets, July 8 as the auction date, and then July 15 as the date for the sale hearing.

Other Specifics

The debtor-in-possession lenders for Pier 1 Imports agreed to let the brand overdraw its DIP facility to around $40 million. This will support the retailer’s liquidation efforts. Pier 1, the DIP lenders, the Creditors’ Committee, and the Ad Hoc Group of Term Lenders are negotiating the term sheet regarding the wind-down.

Other Struggling and Closed Companies

In just the last several weeks, J.C. Penney, Stage Stores, J. Crew, and Neiman Marcus have all filed for bankruptcy as well. State Stores, which is a rural chain, has already released a statement indicating that it will look for a buyer, and if it is unsuccessful, it will liquidate its stores.

Source:

https://www.cnbc.com/2020/05/19/pier-1-plans-wind-down-as-coronavirus-pandemic-stalls-search-for-buyer.html

https://www.businesswire.com/news/home/20200518005801/en/Pier-1-Intends-Pursue-Orderly-Wind%E2%80%91Down-Business

The post Pier 1 Joins the Growing List of Retailers Recently Forced to Close appeared first on Subastral Inc..