FORT WORTH, Texas – Pier 1 Imports, the publicly held furniture and home furnishings specialist, has begun exiting the Canadian market after filing for bankruptcy protection in the United States as part of an effort to either restructure its business or acquire new ownership. It also intends to close as many as 450 of its 930 stores across North America over the coming months while expanding its e-commerce platform south of the border.
In a statement, the company said it has received approximately US$256 million in debtor-in-possession financing from a number of sources that will be used to support continued operations and the sale process through what is called the Chapter 11 process in the U.S.
Robert Riesbeck, who serves as Pier 1’s chief executive officer and chief financial officer, said, “In recent months, we have taken significant steps forward in our business transformation and cost-reduction initiatives. We have worked to establish an appropriately sized and profitable store footprint, operating structure and merchandise assortment that will enable Pier 1 to better serve our customers across store and online channels.
“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,” he added. “We are moving ahead in this process with the support of our lenders and are pleased with the initial interest as we engage in discussions with potential buyers.”
The company said it expects the bidding process for the company to conclude by the end of March.
According to its web site, Pier 1 currently operates about 66 stores in Canada and has closed as many as 11 since 2017 – including all its locations in Quebec. About half of its remaining stores are in Ontario. It’s not known how long it will take to close the remaining locations, most of which are in standalone boxes, power centres, strip centres and in some shopping centre properties.
While a public company, Pier 1 hasn’t disclosed Canada revenue in recent years. Most industry observers estimate Pier 1 sales in this country are unlikely to be much more than $140 million.
The Toronto-based Osler, Hoskin & Harcourt LLP are serving as the company’s Canadian legal advisers. As of press time, the trustee in bankruptcy was unknown.
Most observers agree Pier 1 has been struggling for several years, particularly with the rise of online powerhouses such as Wayfair. In 2015, its shares traded at US$300, falling to US$3.56 at the end of last week. Sales for its most recent quarter, which ended 30 November 2019, fell 13% to US$358 million with a reported net loss of US$59 million.
Pier 1 was one of the few U.S. furniture and home furnishings retailers with a relatively strong presence in Canada. There aren’t many others. For example, Ethan Allen only operates six of design centres in this country.