Pier 1 Imports to liquidate as soon as it can get its stores open, as coronavirus scuttles reorganization

DALLAS - Pier 1 Imports, one of the original home furnishing stores that expanding throughout the U.S. starting in the 1960s, is liquidating it business as soon as it can get its stores open again.

The Fort Worth-based home furnishings retailer filed for bankruptcy in February and was trying to reorganize around about 450 stores, or find a buyer who would keep the business alive.

The coronavirus pandemic dashed those hopes.

Pier 1 said Tuesday it has filed a motion with the bankruptcy court to approve “an orderly wind-down of the company's retail operations as soon as reasonably possible after store location are able to reopen.”

The decision follows months of working to identify a buyer, said Robert Riesbeck, Pier 1's CEO. “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.”

The pandemic has come at a time of deep economic pain for retailers over the last several years, according to the Washington Post. Some major chains deemed essential businesses by local authorities during the pandemic lockdown have fared well. Walmart and Home Depot on Tuesday reported quarterly sales gains. Walmart said online sales rose 74%, and overall sales wen tup nearly 9% from February to April. Home Depot's revenue rose 7%.

But there have been even more hits to retailers selling products not deemed essential, such as furniture and clothing. More than 260,000 stores nationwide closed with the outbreak.

Consumer spending in the weeks since the pandemic was declared fell 8.3% in March then 16.4% in April, according to the Commerce Department. Kohl's reported a 41% drop in revenue for the quarter. J. Crew, Neiman Marcus, Stage Stores and J.C. Penney filed for bankruptcy this month, and analysts say they expect others to follow as more companies run out of cash and the economy struggles, according to the Post.

Pier 1 was founded in 1962 in San Mateo, Calif. and moved to Fort Worth in 1966 becoming one of the largest U.S. home furnishings specialty stores with 1,100 locations and sales of nearly $2 billion. For generations, particularly for the baby boomers, it was the go-to store for adding a layer of personal style to a dorm room, new apartment or house.

Pier 1 graduated from its original beanbag and papasan chairs, love beads and incense - its peace and love days - to offering unique home furnishings and decorative accessories under its own private label. In the 1990s, it expanded into the U.K. and Mexico with boutiques inside Sears stores. It shut down its online business in 2007 and relaunched it in 2012. That gap online as shoppers were gravitating to shopping from home was one decision that some say hurt the retailer.

More recently, competition was fierce in home furnishings not only from Wayfair and Amazon online, but also as Walmart and Target improved merchandise. At the same time competitors moved into more markets. Ikea opened more stores and T.J. Maxx's HomeGoods rapidly expanded.

Riesbeck thanked employees and vendors who stuck with the company knowing the outcome was never certain.

“We deeply value our associates, customers, business partners and the communities in which we operate,” he said. “This is not the outcome we expected or hoped to achieve.”

Until stores are opening, the company is continuing to sell online. Pier 1 has 53 stores in Texas and about 900 stores in the U.S. and Canada. Many of those stores have already permanently closed as part of the retailer's original efforts to reorganize around 450 locations. At the beginning of this year, the retailer had five San Francisco North Bay locations: in Santa Rosa, Vacaville, Novato's Vintage Oaks Shopping Center, Napa's Bel Aire Plaza and one in Mill Valley.

Deadline for bids for the remaining assets is July 1 and an auction date will be July 8 with a sale hearing on July 15. The case was filed in the U.S. Bankruptcy Court in Richmond, Va.

Kirkland & Ellis and Osler, Hoskin & Harcourt have been Pier 1's law firms during the bankruptcy. AlixPartners is its restructuring adviser and Guggenheim Securities is Pier 1's investment banker.