With over 80% decrease in stock prices last year, Texas-based interior design and home decor firm Pier 1 files a Chapter 11 bankruptcy saying that it is looking for buyers. The filing was reportedly made Monday, with U.S. stock markets closed for Presidents Day, in federal bankruptcy court in Richmond, Va.
At the same time, Pier 1 also announced today that it has entered into a Plan Support Agreement (the “PSA”) with a majority of its term loan lenders. The announcement was not prevented amid the company’s efforts throughout the last few months to find buyers without filing for bankruptcy. Shares of Pier 1 are down more than 80% over the past year, and 44% since the start of 2020 alone, as compared with gains of 22% and 4.6% by the benchmark S&P 500 SPX, +0.18% over the said duration.
Robert Riesbeck, 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. 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 also announced the bankruptcy filing through its website. It reads: “Pier 1 is pursuing a sale of the Company and is undertaking Chapter 11 proceedings to facilitate an orderly sale process. The Company fully expects to operate its business in the normal course during this process, and Pier 1’s continuing stores and online platform are open and operating. We remain focused on providing customers with unique, on-trend merchandise and an exceptional shopping experience.”