NYSE-listed Pier 1 Imports, the interiors and home accessories retailer that is also home to a collection by American interiors and makeover guru Joanna Gaines, is pursuing a sale of the company and has entered into a Plan Support Agreement with a majority of its term loan lenders.
This means the Company and its subsidiaries have commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Eastern District of Virginia.
Kirkland & Ellis LLP and Osler, Hoskin & Harcourt LLP are serving as legal advisors to Pier 1 in the U.S. and Canada, respectively. AlixPartners LLP is serving as the Company’s restructuring advisor and Guggenheim Securities, LLC is serving as the Company’s investment banker.
The Company intends to use this process to complete the previously announced closure of up to 450 store locations, which includes the closure of all its stores in Canada. To date, the Company has closed or initiated going-out-business sales at over 400 locations. The Company is also in the process of closing two distribution centres to reflect its revised store footprint.
Robert Riesbeck, Pier 1’s Chief Executive Officer and Chief Financial Officer said, “Today’s actions are intended to provide Pier 1 with additional time and financial flexibility as we now work to unlock additional value for our stakeholders through a sale of the Company. We are moving ahead in this process with the support of our lenders and are pleased with the initial interest as we engage in discussions with potential buyers.”
Pier 1 has received a commitment of approximately $256m in debtor-in-possession financing from Bank of America N.A., Wells Fargo National Association, and Pathlight Capital LP. Following court approval, the Company expects this financing, together with cash flows from operations, to provide ample liquidity to support continued operations and the sale process through the Chapter 11 process.
Pier 1’s stores and online platform are open and operating, and expects to operate its business in the normal course during this process.
The Company is filing customary first day motions that, once approved by the court, will allow the Company to smoothly transition its business into Chapter 11, including, among other things, granting authority to pay wages and benefits and honour customer commitments in the ordinary course of business. The Company will also continue to pay vendors and suppliers in the ordinary course for all goods and services provided on or after the Chapter 11 filing date.
Pier 1 intends to conduct a court-supervised sale process and complete the sale through a Chapter 11 plan. Pier 1 expects that the deadline to submit qualified binding bids will be on or around March 23, 2020, subject to procedures to be approved by the court.
In connection with its plans to close all its stores in Canada, Pier 1 is also commencing proceedings in Canada.
A&G Realty Partners is assisting the Company with its previously announced store closures and lease modifications.