In a somewhat expected move, Fort Worth-based Pier 1 announced Monday that it began Chapter 11 bankruptcy proceedings and is pursuing a sale of the company.
The company said Monday it plans to use this process to complete the closure of nearly half of its stores, which were announced last month, including all its stores in Canada, and to find a buyer for the struggling retailer.
Pier 1 said they have initiated going-out-business sales at over 400 locations and is in the process of closing two distribution centers "to reflect its revised footprint."
The company added that it is "engaged in discussions with multiple potential buyers" that could acquire the retailer out of bankruptcy. The deadline to submit qualified bids will be on or around March 23, pending court approval.
“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,” Pier 1 CEO Robert Riesbeck said in a press release. "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."
In their statement, Monday Pier 1 said they secured approximately $256 million in debtor-in-possession financing from Bank of America, Wells Fargo and Pathlight Capital that, with court approval and with cash flow from operations, will "provide ample liquidity to support continued operations and the sale process through the Chapter 11 process."
While hundreds of locations are liquidating merchandise at stores across North America, Pier 1's online store, meanwhile, is open and operating normally.
The company said Monday they remain, "focused on providing customers with unique, on-trend merchandise and an exceptional shopping experience. The company expects to operate its business in the normal course during this process."
The company added they would be adding customary first-day motions to the Chapter 11 filing in Virginia to allow them to continue paying wages and benefits, honor customer commitments and continue to pay vendors and suppliers. Those motions are expected to be approved by the court.
Pier 1's shares have fallen 45% since the start of the year. Shares opened Monday at $3.75 per share and closed down 5.82% at $3.56 per share.