Pier 1 Imports is closing up to 450 of of its stores -- nearly half of its total of 942 nationwide -- and will be laying off an unspecified number of its 4,000 sales associates and corporate staff “to better align its business with the current operating environment,” as the company puts it in reporting bleak third-quarter fiscal 2020 results. It will also be closing some distribution centers and may file for bankruptcy.
“Pier 1 has drafted a bankruptcy proposal and made a presentation to creditors last month, with a plan to create a smaller post-bankruptcy company with about $900 million in annual sales, a person familiar with the matter said on Monday,” Reuters' Nivedita Balu and Mike Spector write.
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Annual sales were $1.6 billion last year.
“The company also held discussions with lenders about potentially providing financing that would help the retailer continue operating while under bankruptcy protection, the person said. The retailer was not immediately available for a comment,” Balu and Spector add.
Comparable sales decreased 11.4% compared to the year before for the Fort Worth, Texas-based chain, which was founded as a single store in 1962 in San Mateo, California.
“Company executives previously disclosed plans to close about 70 stores in fiscal 2020 as part of turnaround efforts. Pier 1 has posted sales declines in eight consecutive quarters and has struggled to compete with rivals such as Walmart and Target,” Thomas Barrabi writes for FOXBusiness.
“Our first customers were post-World War II baby boomers looking for beanbag chairs, love beads and incense,” the company history remembers wistfully. (Perhaps a bit too wistfully, as love beads and incense weren’t a thing yet in ’62, even in California, and the eldest of boomers were just 16.)
“Pier 1 has posted multiple quarters of declining sales and losses amid a raft of new competitors. On Monday, it reported its third-quarter loss widened to $59 million from $50 million after [net] sales declined 13% to $358.4 million,” Bloomberg’s Lauren Coleman-Lochner, Matthew Townsend and Katherine Doherty report.
"It’s led by Robert Riesbeck, a turnaround manager named as chief executive officer in November. He’s cutting expenses by about half, including canceling some existing orders to align Pier 1’s buying with plans for a smaller store base,” a source tells them.
The company’s leadership sought to strike an optimistic note about the store closings. Riesbeck … called them ‘a necessary business decision,’” Sapna Maheshwari writes for The New York Times.
“Mr. Riesbeck, a former leader of two retailers [FullBeauty Brands and HHGregg] that filed for bankruptcy, added that Pier 1’s actions would ‘enable us to move forward with an appropriately sized store footprint and operating structure as an omni-channel retailer,’” Maheshwari adds.
“The home goods retailer has been struggling for years against rising pressure online and from big-box rivals. Its stock, which was at $300 a share in 2015, is trading at around $5 today. Pier 1 (PIR) shares tumbled nearly 17% Monday, after Bloomberg reported the news of a potential bankruptcy,” Nathaniel Meyersohn writes for CNN Business.
Pier 1 is far from the only casualty of competition and shifting consumer habits in retail,” Meyersohn continues. “In 2019, U.S. retailers announced 9,302 store closings, a 59% jump from 2018 and the highest number since Coresight Research began tracking the data in 2012.”
“Pier 1 has struggled for years, churning through a series of executives and marketing strategies, all the while dealing with a store count increasingly out of proportion to its overall business and the rise of e-commerce. Under prior management, online sales were discontinued for a period of time and while they were resumed the company has had to play catch-up online ever since,” Warren Shoulberg observes for Forbes.
“With a radically reduced physical presence, Pier 1 could be in a position to be better suited to the retail landscape, but its lackluster stores, often poorly located and underinvested in over the past few years, will still have to carry the load as it tries to get fully up to speed online,” Shoulberg adds.
Maybe it should decree a love-in at its remaining outlets in an effort to recapture that '60s mojo.