Pier 1 Imports has Filed for Bankruptcy
The home goods retail chain filed for Chapter 11 bankruptcy and announced the decision on Monday. In addition to filing for bankruptcy, the retailer is also closing down 450 of its stores.
Some speculate that the bankruptcy filing was motivated by the fact that the retailer has too many store fronts. Filing for bankruptcy allows for these stores to be shut relatively quickly without having to renegotiate lease deals with each landlord whose land supports a Pier 1 store.
Additionally, the future of Pier 1 Imports is less uncertain given the desire to sell the chain but also by the fact that several banks have aggregately lended Pier 1 $256 million.
"Somebody believes in them, because they've convinced banks to give them nearly $260 million, which allows them to continue operating the business," Sid Scheinberg, a bankruptcy attorney, said. "There's something there that's worthwhile to continue operating or get sold."
The large loan allows the retailer to continue its operations as the bankruptcy filing is processed and finalized. As a result, employees will still get paid along with suppliers. A court ruling could also affect the sale process. For example, a judge could rule that Pier 1 Imports be sold at auction instead of through a supervised sale.