Pier 1 Imports to close 450 stores across US

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Pier 1 to close almost half its stores (Credit: Getty Images)

Pier 1 to close almost half of its stores (Credit: Getty Images)

Pier 1 Imports is the latest retailer to shutter hundreds of stores nationwide amid plunging sales.

The home goods retailer said it plans to close almost half of its stores in the U.S., according to a Securities and Exchange Commission filing on Monday.

Texas-based Pier 1 also will close some distribution centers, slash corporate expenses and lay off corporate employees.

“Fiscal third-quarter sales and margins remained under pressure” as the retailer sought to clear out unsold merchandise, said the firm’s CEO and CFO, Robert Riesbeck, in a statement.

He added the 450 store closures, while “never easy,” are a “necessary business decision.”

Industry watchers have been long suspecting that Pier 1 will be at risk of massive store closures or bankruptcy.

In April, S&P Global Ratings downgraded the retailer to a rating of CCC- from CCC+. The retailer had been slowly closing its stores over the years but said it would close 70 more in its 2020 fiscal year, then later said it could close up to 15 percent of its portfolio, according to an October report from S&P Global Market Intelligence. S&P predicted in October that the firm had a 20 percent probability of default in the next 12 months.

Peir 1 has not yet filed for bankruptcy. Still, the news comes as a string of brick-and-mortar retailers have either opted to liquidate or restructure their businesses, and as 2019 saw almost 9,300 store closure announcements in the U.S., according to data firm Coresight Research.

Pier 1 has about 950 stores in the U.S., including at least four in New Jersey, five more in New York City — along with those in Chicago, Miami and Los Angeles among others — but the company did not say which stores were on the chopping block. Pier 1 did not immediately return a request for comment.

Two shopping center real estate investment trusts and one industrial REIT cited Pier 1 as among their biggest tenants, according to S&P. SITE Centers Corp. had 25 leases with Pier 1 as of Sept. 30. Kimco Realty Corp. reported 30 leases and First Industrial Realty Trust said the retailer’s tenancy comprised 1.1 percent of its portfolio.

Pier 1 on Monday reported that its fiscal year third quarter sales — which ended Nov. 30 — dropped 11.4 percent compared to the year before.

Net sales also declined 13.3 percent to $358.4 million compared to fiscal 2019’s third quarter figure. Its net loss was almost $59 million for the period, a widening from the $50.4 million the year before.

Pier 1 has been taking steps to reverse course. Riesbeck was named CEO in November, replacing Cheryl Bachelder, who was the firm’s interim CEO since December 2018. Pier 1 that month also swapped former president Douglas Diemoz with Donna Colaco, who had served as executive vice president and chief customer officer.

The firm’s stock fell 16.93 percent Monday to close at $5.18.

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