Fort-Worth based Pier 1 Imports, which previously said it would close half of its fleet of stores, announced in a statement it was seeking court approval to liquidate all of its roughly 540 stores as soon as possible.
In a statement, Pier 1 Imports said the permanent store closures are due to the “profound impact of COVID-19,” which prevented the retailer from securing a buyer after filing for Chapter 11 bankruptcy in February. Golds Gym, J.C. Penney, J. Crew Group, and Neiman Marcus have filed this year, as well, and there will be more coming, all accelerated by the coronavirus pandemic.
“This decision follows months of working to identify a buyer who would continue to operate our business going forward,” said CEO Robert Riesbeck. “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.”
Pier 1 started almost 50 years ago, south of San Francisco. With love beads, incense, and beanbag chairs, it became a baby-boomer icon and grew up with its customers. By 2000, sales topped $1 billion, and Pier 1 soon had more than 1,000 stores and a landmark tower in downtown Fort Worth.
By early 2007, the housing slump began, and things fell apart. Pier 1 lost $228 million, a devastating amount for a company that almost always operated in the black.
The company made a turnaround following the Great Recession (you can read more about that here).
But in recent years, its sales have fallen as it struggled to compete with online retailers Wayfair and Amazon.
Alan Shor, the co-founder of The Retail Connection, recently blogged for D CEO about how the retail industry has been undergoing an evolution, with the tremendous growth of e-commerce, technology, and the customer experience all evidence of the transforming demands of the consumer.
“The unfortunate onset of COVID-19 has greatly accelerated these trends and highlighted their importance in both the retail and real estate industries,” he said.
For those of us in the retail real estate business, on either/both the services and investment sides, the domino effect has been substantial. While restructuring and store closings provide location opportunities for other retailers and restauranteurs, any material new store growth will be choppy for a while. The near term focus will be rent relief discussions, a review of existing portfolios, and a push to renew, relocate, and/or close existing stores.
Pier 1 expects to conduct its asset sales according to the bidding procedures established by the bankruptcy court in February. The company has proposed July 1 as the asset bid deadline, July 8, as the auction date and July 15 as the sale hearing date.