Pier 1 plans store closures, job cuts amid sluggish sales
Pier 1 Imports Inc. is expected to receive a revised purchase offer in bankruptcy that would keep open fewer than 100 of the company’s 900-plus locations, according to people with knowledge of the developments.
The bid, from a company called CSC Generation, comes after the retailer’s bankruptcy court process was paused while stores are shuttered in accordance with coronavirus containment measures. Bloomberg previously reported that Pier 1 was weighing a bid that would keep a small portion of its locations open.
With most liquidation sales halted, stakeholders have fewer options before them when retailers collapse. While bankers and debtholders typically compare a company’s recovery prospects with the estimated cost of liquidation sales, the latter has become impossible to gauge with commerce shut down across the U.S.
A representative for Pier 1 and one of CSC Generation’s founders didn’t respond to requests for comment. Attempts to reach CSC Generation were unsuccessful.
With no present option to liquidate, Pier 1’s lenders have looked at taking over equity control of the chain. But that idea may not be particularly attractive as the nation slips into a possible recession.
Pier 1 sought court protection in February with plans to shut about half of its stores and said it was in talks with multiple potential buyers. The Fort Worth, Texas-based company had posted multiple quarters of declining sales and losses amid a raft of new competitors like Wayfair Inc.
On March 30, it canceled a scheduled auction for its assets, saying lenders would take ownership of the company. However, the company said it was still in discussions with various parties about how to maximize the value of its assets.
CSC Generation was founded in 2016 as a joint venture of entrepreneur Justin Yoshimura and China Science & Merchants Investment Management Group and has said it’s “saving retail” by keeping some brands alive.
The company has bought the intellectual property of bankrupt department-store chain Bon-Ton Stores Inc. and home decor chain Z Gallerie Inc. In 2017, it bought home furnishing store DirectBuy, with the goal, it has said, of building a home-goods platform by acquiring Pier 1 and other brands.
The case is Pier 1 Imports Inc., 20-30805, U.S. Bankruptcy Court, Eastern District of Virginia (Richmond)