Pier 1 Imports Inc. shares fell close to 40 per cent a day after the home-furnishings retailer reported more falling sales, plans to trim staff and close hundreds of stores.

The company has also drafted a bankruptcy plan and canceled some orders, according to people with knowledge of the matter. Comparable sales, a key measure for retailers, fell more than 11 per cent in the third-quarter, Pier 1 reported late Monday.

The stock tumbled to as low as $3.16 before paring some of the decline. As of 10:56 a.m. in New York, shares were down 22 per cent.

The Fort Worth, Texas-based company said on Monday that lower sales were due to fewer customer visits to its stores.

“The broader challenge that’s plagued the entire industry is that foot traffic has slowed,” Bloomberg Intelligence analyst Poonam Goyal said. “Pier 1 sold furniture, but also smaller home items. Some of those items are impulse purchases and if consumers aren’t in the stores, they don’t make additional purchases.”

--With assistance from Katherine Doherty.