2020-05-19 22:32:53 UTC
New York (CNN Business) The final nail is being driven in Pier 1's wicker casket: It's on the verge of completely shutting down three months after it filed for bankruptcy.
Pier 1 announced Tuesday that it's asking the bankruptcy court to cease its retail operations "as soon as reasonably possible." It blames temporary store closures caused by coronavirus and failing to find a buyer for the drastic decision.
The 58-year-old company said it analyzed alternative ways to remain in business, but liquidation was the best option.
"Ultimately, due to the combination of a challenging retail environment and the new reality and uncertainty of a post-Covid world, the company and its advisers determined that an orderly wind-down is the best way to maximize the value of Pier 1's assets," the company said in a press release.
Pier 1 (PIRRQ) said it plans to sell its remaining inventory, website and intellectual property. Orders placed on its website will continue to be fulfilled.
Its lenders have agreed to let Pier 1 overdraw its lending facility by $40 million to help it fund the liquidation process.
Once a mall staple, Pier 1 sales have slumped in recent years because of growing online competition and shifting consumer habits.
The home goods sector has been hit particularly hard by the rise of Amazon (AMZN), Wayfair (W) and other online competition. Big-box chains such as Target (TGT) and Walmart (WMT) have also strengthened their home goods offerings.
Pier 1 has cut its store count in half since last year. It announced in February that it was closing around 450 stores, including all its locations in Canada. The company currently has more than 500 stores — down from 1,000 last year.
It's not alone in filing for bankruptcy: JCPenney, Neiman Marcus, J Crew have all filed in recent weeks, blaming the virus and shifting consumer behavior.