Pier I Imports, after years of trying to fix itself, has filed for Chapter 11 bankruptcy and said it already has the approval of its lenders to pursue a sale of the company.
The home furnishings retailer is in the process of closing up to 450 stores, including all its stores in Canada.
The retailer has received about $256 million in debtor-in-possession financing from Bank of America, Wells Fargo and Pathlight Capital LP.
Pier 1 CEO and chief financial officer Robert Riesbeck said in a statement that the decision to file for bankruptcy protection will give the company more "time and financial flexibility" to get Pier 1 through to a sale.
A big question now is who will step up and bid for Pier 1?
Just last week, no other bidders came forward in the Forever 21 bankruptcy after mall developers Simon Property and Brookfield together with Authentic Brands made an initial bid of $81 million. Authentic Brands already owns 50 brands, including others it purchased out of bankruptcy in recent years such as Nine West and most recently Barneys New York, which is in the process of closing all its stores.
Pier 1 is asking the court to set March 23 as a deadline for bids to be accepted.
"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," Riesbeck said.
Pier 1 has struggled through multiple leadership changes and with the expense of building up a separate online business. At the same time, competitors such as Amazon and Wayfair gained market share with free shipping and often lower prices. Walmart and Target improved their home selection in recent years as HomeGoods expanded into new markets, going head-to-head with Pier 1 in neighborhood shopping centers.
But, all is not great with the rapid rise at Wayfair. The online retailer on Friday cut its workforce by 550 people, including 350 at its Boston headquarters.
Pier 1 in recent months has been cutting costs and jobs at its headquarters in Fort Worth, Texas, while coming up with a plan to close half its stores. It also closed two distribution centers.
Pier 1 was founded in 1962 in San Mateo, Calif. The business was moved to Fort Worth in 1966. It grew as the baby boomer generation formed new households. It was the place to shop for a layer of style for a new apartment long before Pottery Barn and Crate & Barrel expanded nationally.
As part of its first-day motions in the U.S. Bankruptcy Court in the Eastern District of Virginia, Pier 1 is asking the court to continue to pay employees wages and benefits and vendors will continue to be paid for goods and services provided after Monday's bankruptcy filing, the company said.
