Pier 1 Imports Store Closing: All 540 Stores To Permanently Shut Down

The COVID-19 pandemic finally did in ailing home furnishings and decor giant, Pier 1 Imports, forcing it to ask a bankruptcy court Tuesday to close all its remaining 540 stores in the United States after failing to find a buyer.

The pandemic was the last straw for the Fort Worth, Texas-based retailer, which was undergoing reorganization after filing for Chapter 11 bankruptcy protection Feb. 17. Pier 1 closed all its stores in Canada as part of this filing.

The company opened in 1962 selling love beads, scented candles, beanbag chairs and incense, among other items to hippies in San Mateo, California. True to its tradition, the store still continued to sell these products as it entered bankruptcy.

This single store grew to a chain of 1,200 stores at its height, and Pier 1 then adopted the slogan, "From Hippie to Hip."

Executives said Pier 1 will start going-out-of-business sales as soon as it can reopen stores temporarily shut due by the pandemic.

As with other shuttered brick-and-mortar retailers, Pier 1 met its doom at the hands of online retailers that undersold and delivered goods faster.

Its demise accelerated over the past five years due to its inability to adapt to the new market realities. Revenue plummeted from $1.9 billion in 2016 to $1.4 billion in 2019. The company posted a net loss of $310 million last year.

In February, CEO Robert Riesbeck explained the company's Chapter 11 filing was intended to give Pier 1 more time and financial flexibility as it sought a buyer. Then COVID-19 set in, destroying the company's quest for a savior.

"This decision follows months of working to identify a buyer who would continue to operate our business going forward," said Riesbeck on Tuesday. "Unfortunately, the challenging retail environment has been significantly compounded by the profound impact of COVID-19, hindering our ability to secure such a buyer and requiring us to wind down."

In shutting down, Pier 1 joins other major retailers that have gone under due to the immense demand destruction wrought by COVID-19. Apparel maker J. Crew, department store chains J.C. Penney and Neiman Marcus have all declared bankruptcy in May. More retailers are set to follow in the remaining months of the year.

BDO Consulting’s “Retail in the Red” bi-annual report released in March reported on retail bankruptcies in the second half of 2019 through January and February 2020. It showed the pace of bankruptcies accelerated from 2018 to 2019 but stands to skyrocket into 2020.

“For quite a while, we have seen department stores that anchor malls struggling, which has hurt a lot of specialty apparel and shoe retailers that fill malls,” said David Berliner, a Partner in BDO Consulting.