Last Updated on April 17, 2022 by Mark P.
Bankruptcy is never fun, but filing Chapter 11 bankruptcy for a company is a different type of financial and emotional strain, one that the retail chain Pier 1 is about to learn all too well. On February 17th, it became official that Pier 1, a home furnishing retailer with it’s headquarters located in Fort Worth, Texas, issued a press release to Business Insider that they will be “pursuing a ‘orderly sale process’ by filing for Chapter 11 bankruptcy.”
This marks a dark chapter (no pun intended) for the nearly sixty-year old company. Pier 1 joins the sorrowful list of large retailers who have had to shut down or declare bankruptcy, either due to mismanagement or because they became victims to the growingly convenient age of digital e-commerce. Since 2018, both Sears and Kmart (owned by the same hedge fund parent) have declared bankruptcy, meaning the age of large retail chains could be coming to an end sooner than later.
BI reporter Aine Cain wrote in her article that the “Texas-based company announced its intent to close 450 stores in January, and Business Insider reported that Pier 1’s social media team revealed it had deleted information about its soon-to-be-shuttered stores from its website. All Pier 1 stores in Canada will close, as well as two distribution centers.” In their statement, Pier 1 CEO and CFO Robert Riesbeck said that this decision came down soley to “cost reduction” and that this action would establish “an appropriately sized and profitable store footprint.”
This hard decision comes after years of losing profits and closing down existing locations. CBS reports that “As of March 2019, the company had roughly 18,00 employees in the U.S. and Canada, with about 4,000 of those jobs full-time, according to the company’s last annual financial report.” The report highlights the harsh road Pier 1 has faced, noting that “Pier 1’s sales and profits have slumped in recent years. Its revenue fell from nearly $1.9 billion in 2016 to $1.4 billion last year, with the company losing $310 million in 2019.
CBS continues to state that their current assets and liabilities reach an estimated $500 million according to records filed in U.S. bankruptcy court in Richmond, Virginia. As of now Pier 1 “is requesting that the court set March 23 as the deadline for bids to be accepted.
For now, Pier 1 plans to continue operating day to day as normal for the time being as the bankruptcy process continues.