After continued struggles, Pier 1 Imports (PIR) has announced that it will be closing up to 450 stores, which is almost half of its total 942 locations amid rumors that it may file for Chapter 11 bankruptcy. The home décor retailer also said it will reportedly reduce its corporate headcount by 300 workers amid office and distribution center closures.

The news of the store closures comes as Pier 1 released its fiscal third-quarter earnings report, showing a decrease in sales of 11.4% compared to Q3 fiscal 2019. The poor sales numbers were attributed to the reduced number of holiday shopping days leading up to Christmas, which Pier 1 said negatively impacted its earnings for the quarter.

Comparable sales for Pier 1 were also affected by approximately 650 basis points, which the company said it expects to “reverse” in fiscal Q4 2020. Net sales for the company also dropped by 13.3% to $358.4 million, with a net loss of $59 million.

“Fiscal third quarter sales and margins remained under pressure as we completed our efforts to clear out non-go-forward merchandise,” Robert Riesbeck, CEO and CFO at Pier 1 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.

“To further advance our progress, we are announcing additional actions today that will enable us to move forward with an appropriately sized store footprint and operating structure as an omni-channel retailer, and better position Pier 1 to meet our customers where they shop,” he added.

The reduced company footprint is an effort by Pier 1 to “better align its business with the current operating environment.” Pier 1 has hired a third-party liquidator to facilitate the store closings as it received approval from its lender base to reduce its overall store portfolio, which Riesbeck said was not an easy decision but a necessary business decision.

Pier 1 has faced rumors of a bankruptcy filing, hiring a financial advisor in early-December. In September, the company announced it was closing up to 140 stores, which it said at the time could increase depending on lease negotiations.

Sources told Bloomberg that Pier 1 has already created a plan for bankruptcy, meeting with creditors on a strategy for a smaller company that produces $900 million in annual sales. The retailer has also canceled some orders as it looks to its current lenders for Chapter 11 financing, sources for the news outlet said.

Shares of Pier 1 Imports stock was down 33.53% as of 9:33 a.m. EST on Tuesday.

Pier 1 Imports
After announcing that it would be closing 45 stores, Pier 1 Imports filed bankruptcy. A Pier 1 Imports sign is seen on April 19, 2019 in Miami, Florida. The company announced that it's shuttering as many as 45 locations this year or up to 15% of stores if they are unable to reach performance goals, sales targets, and reductions in occupancy and other costs. Getty Images/Joe Raedle
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