Files Voluntary Chapter 11 Petitions to
Facilitate Sale Process; Engaged in Discussions with Multiple
Potential Buyers
Receives Commitment of Approximately $256
Million in Debtor-in-Possession Financing
Stores and Pier1.com Remain Open and are
Operating; Continuing to Provide Customers with Unique, On-Trend
Merchandise and Exceptional Shopping Experience
Pier 1 Imports, Inc. (NYSE:PIR) (“Pier 1” or the “Company”)
today announced that it has entered into a Plan Support Agreement
(the “PSA”) with a majority of its term loan lenders and is
pursuing a sale of the Company. To facilitate an orderly sale
process and implement the PSA, the Company and its subsidiaries
have commenced voluntary Chapter 11 proceedings in the U.S.
Bankruptcy Court for the Eastern District of Virginia.
The Company also intends to use this process to complete the
previously announced closure of up to 450 store locations, which
includes the closure of all its stores in Canada. To date, the
Company has closed or initiated going-out-business sales at over
400 locations. The Company is also in the process of closing two
distribution centers to reflect its revised store footprint.
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.”
Pier 1 has received a commitment of approximately $256 million
in debtor-in-possession financing from Bank of America N.A., Wells
Fargo National Association, and Pathlight Capital LP. Following
court approval, the Company expects this financing, together with
cash flows from operations, to provide ample liquidity to support
continued operations and the sale process through the Chapter 11
process.
Pier 1’s stores and online platform are open and operating, and
the Company remains focused on providing customers with unique,
on-trend merchandise and an exceptional shopping experience. The
Company expects to operate its business in the normal course during
this process.
Mr. Riesbeck added, “We will continue to serve our customers
regardless of how and where they shop with the style, value and
selection of merchandise they want as we move through this process,
and we are committed to working seamlessly with our vendors and
partners. We appreciate the ongoing dedication of our associates,
whose efforts in providing our loyal customers with the experience
they expect from our brand are critical to our success and the
future of Pier 1.”
The Company is filing customary first day motions that, once
approved by the court, will allow the Company to smoothly
transition its business into Chapter 11, including, among other
things, granting authority to pay wages and benefits and honor
customer commitments in the ordinary course of business. The
Company will also continue to pay vendors and suppliers in the
ordinary course for all goods and services provided on or after the
Chapter 11 filing date.
Pier 1 intends to conduct a court-supervised sale process and
complete the sale through a Chapter 11 plan. Pier 1 expects that
the deadline to submit qualified binding bids will be on or around
March 23, 2020, subject to procedures to be approved by the
court.
In connection with its plans to close all its stores in Canada,
Pier 1 is also commencing proceedings in Canada.
Court filings and other documents related to the
court-supervised process are available at
https://dm.epiq11.com/Pier1, or by calling the Company’s claims
agent, Epiq Corporate Restructuring LLC, at (866) 977-0883 (or +1
(503) 520-4412 for international calls) or sending an email to
pierone@epiqglobal.com.
A&G Realty Partners is assisting the Company with its
previously announced store closures and lease modifications. Pier 1
landlords are encouraged to contact A&G Realty Partners through
its website, www.agrep.com.
Kirkland & Ellis LLP and Osler, Hoskin & Harcourt LLP
are serving as legal advisors to Pier 1 in the U.S. and Canada,
respectively. AlixPartners LLP is serving as the Company’s
restructuring advisor and Guggenheim Securities, LLC is serving as
the Company’s investment banker.
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements contained in this press release may
constitute “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Pier 1 and the other Debtors may
also make forward-looking statements in other reports filed with
the United States Securities and Exchange Commission (“SEC”), in
press releases, in presentations and in material delivered to Pier
1’s shareholders. Forward-looking statements provide current
expectations of future events based on management’s assumptions and
assessments in light of past experience and trends, current
economic and industry conditions, expected future developments, and
other relevant factors. These statements encompass information that
does not directly relate to any historical or current fact and
often may be identified with words such as “believe,” “expect,”
“estimate,” “anticipate,” “plan,” “may,” “will,” “intend” and other
similar expressions.
Management’s expectations and assumptions regarding: risks and
uncertainties relating to the Chapter 11 Cases, including but not
limited to, Pier 1’s ability to obtain Bankruptcy Court approval
with respect to motions in the Chapter 11 Cases; the effects of the
Chapter 11 Cases on Pier 1 and on the interests of various
constituents; Bankruptcy Court rulings in the Chapter 11 Cases and
the outcome of the Chapter 11 Cases in general; the length of time
the Debtors will operate under the Chapter 11 Cases; risks
associated with third-party motions in the Chapter 11 Cases; the
potential adverse effects of the Chapter 11 Cases on Pier 1’s
liquidity or results of operations and increased legal and other
professional costs necessary to execute the Debtors’
reorganization; the conditions to which Pier 1’s
debtor-in-possession financing is subject and the risk that these
conditions may not be satisfied for various reasons, including for
reasons outside of the Debtors’ control; Pier 1’s ability to
consummate sales of its assets and the terms and conditions of any
such sales; the effectiveness of Pier 1’s marketing campaigns,
merchandising and promotional strategies and customer databases;
consumer spending patterns; inventory levels and values; the
effectiveness of Pier 1’s relationships with, and operations of,
its key suppliers; risks related to changes in U.S. policy related
to imported merchandise, particularly with regard to the impact of
tariffs on goods imported from China and strategies undertaken to
mitigate such impact; changes in foreign currency values relative
to the U.S. dollar; Pier 1’s ability to retain its senior
management team; continued volatility in the price of Pier 1’s
common stock; and other future results are subject to risks,
uncertainties and other factors that could cause actual results to
differ materially from the anticipated results or other
expectations expressed in the forward-looking statements.
Additional risks and uncertainties that may affect the Debtors
operations and performance include, among others: the failure by
Pier 1 to identify, develop and successfully implement immediate
action plans and longer-term strategic initiatives; the inability
of Pier 1 to anticipate, identify and respond to changing customer
trends and preferences for home décor and furniture and to
identify, source, ship and deliver items of acceptable quality to
its U.S. distribution and fulfillment centers, stores and customers
at reasonable prices and rates in a timely fashion; risks related
to outsourcing certain business processes to third-party vendors,
including disruptions in business, cyber security threats and
increased costs; an overall decline in the health of the U.S.
economy and its impact on consumer confidence and spending;
disruptions in Pier 1’s domestic supply chain or e Commerce
website; failure to successfully manage and execute Pier 1’s
marketing initiatives; negative impacts from a failure to control
merchandise returns and recalls; potential impairment charges on
certain long-lived assets; Pier 1’s access to adequate operating
cash flow, trade credit, borrowed funds and capital to fund its
operations and pay its obligations as they become due, including
the impact of continued deterioration of Pier 1’s financial
performance or adverse trends or disruption in the global credit
and equity markets; the highly competitive retail environment with
companies offering similar specialty home merchandise; factors
affecting consumer spending, including employment levels and
disposable income, interest rates, consumer debt levels, fuel and
transportation costs and other factors; an inability to operate in
desirable locations at reasonable rental rates and to close
underperforming stores at or before the completion of their lease
terms; failure to attract, motivate and retain an effective
management team or changes in the cost or availability of a
suitable workforce; failure to successfully manage omni-channel
operations; seasonal variations; increases in costs that are
outside Pier 1’s control; adverse weather conditions and natural
disasters; risks related to Pier 1’s dependence on technology in
the operation of its business; failure to protect consumer data;
failure to successfully implement new information technology
systems and enhance existing systems; risks related to
cybersecurity and e-Commerce related fraud; failure to maintain
positive brand perception and recognition; risks related to
imported merchandise including the health of global, national,
regional, and local economies and their impact on vendors,
manufacturers and merchandise; factors beyond Pier 1’s control,
including general economic and market conditions, fluctuations in
Pier 1’s financial condition or other factors that could affect the
common stock price; risks related to actions by activist
shareholders; regulatory and legal risks; and litigation risks.
Pier 1 assumes no obligation to update or otherwise revise its
forward-looking statements even if experience or future changes
make it clear that any projected results expressed or implied will
not be realized. Additional information concerning these risks and
uncertainties is contained in Pier 1's Annual Report on Form 10 K
for the fiscal year ended March 2, 2019, as filed with the SEC and
in Pier 1’s other filings with the SEC.
About Pier 1 Imports, Inc.
Founded with a single store in 1962, Pier 1 Imports is a leading
omni-channel retailer of unique home décor and accessories. The
Company’s products are available through approximately 930 Pier 1
stores in the U.S. and online at pier1.com. For more information or
to find the nearest store, please visit pier1.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200217005335/en/
Pier 1 Contact: Jennifer Engstrand Reeder
mediarelations@pier1.com Media Contact: Joele Frank
Wilkinson Brimmer Katcher Leigh Parrish / Andrea Rose
212-355-4449
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