Pier 1 to close 450 stores, says third-quarter loss widens
Pier 1 Imports on Monday after market close said it intends to shut up to 450 locations, as it unexpectedly reported quarterly earnings.
Its third-quarter loss widened from a year ago, the report said, as same-store sales declined 11.4%.
The company said it also plans to shut certain distribution centers and reduce its corporate expenses, which includes slashing its corporate headcount.
“Fiscal third quarter sales and margins remained under pressure,” CEO Robert Riesbeck said in a statement. “Looking ahead, we believe that we will deliver improved financial results over time as we realize the benefits of our business transformation and cost-reduction initiatives.”
Earlier in the afternoon, its shares tanked more than 25% before being halted for news, following a report from Bloomberg that said the company is preparing to file for bankruptcy and slash jobs.
The stock was also briefly halted due to volatility earlier Monday.
In November, Riesbeck was named CEO, replacing Cheryl Bachelder, who had been serving as interim CEO since December 2018. Riesbeck had been Pier 1′s CFO since July 2019 and has prior experience in turnaround situations.
During its latest earnings conference call in Septemer, Pier 1 executives said the company was planning to shutter about 70 stores in fiscal 2020, and potentially more, depending on how situations with landlords pan out.
As of Aug. 31, the company listed $190 million outstanding under a senior secured term loan, $50 million of borrowings under a first-in, last-out tranche and $55 million of borrowings under a $350 million revolving credit facility.
Before joining Pier 1, Riesbeck was CFO at FullBeauty Brands, in addition to serving as CEO and president at furniture company H.H. Gregg and an operating executive at private equity firm Sun Capital Partners.
“We believe we have sufficient liquidity to achieve our fiscal 2020 goals,” Riesbeck said in September.
Pier 1′s stock is down about 31% over the past 12 months. It has a market cap of just about $21.5 million.
A representative from Pier 1 didn’t immediately respond to CNBC’s request for comment.