May brought the final chapter in a long saga for beleaguered home goods retailer, Pier 1. The Fort Worth-based company confirmed that it will go out of business, shuttering their 540 stores and closing their ecommerce website.
Signals of Pier 1’s distress go back quite some time, with particularly alarming signs appearing over the previous holiday season. LinkUp’s own jobs data identified significant job listing declines that defied typical seasonal retail patterns. The news didn’t improve from there, with the announcement of a Chapter 11 filing arriving in February. At the time, plans entailed a closure of 450 stores (including all stores in Canada) as well as two distribution centers. By late February, 400 of those stores had already shuttered or had begun going out of business sales.
The company was hoping to find a buyer to reorganize remaining stores and keep the business alive, but the coronavirus pandemic dashed those hopes entirely. Pier 1’s Chief Executive Robert Riesbeck said, “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.”
With current business headlines brandishing snappy terms like “Retail Apocalypse,” it’s evident that Pier 1 is far from the only company subject to coronavirus’ impact. For retailers struggling before the pandemic hit, it’s a near certainty that they will fall for good in its wake. JC Penney, J. Crew, Neiman Marcus, Tuesday Morning and more have all filed for bankruptcy amid COVID-19. Though many have expressed plans to continue operations, Pier 1 is a potential harbinger of things to come.
In the pre-COVID landscape, the demise of retail was experienced as a bifurcation; with mid-range companies struggling and both the high and low end showing either stability or growth. But in this new climate, we’re not only bleeding from the middle – the pain is hitting every segment, from premium to price-conscious. The exception seems to be low-price retailers offering household essentials, like Dollar Tree, who has seen increased job listings amid the pandemic.
As for Pier 1’s remaining inventory, going-out-of-business sales will extend to all 540 locations as soon as it can reopen locations temporarily closed due to the pandemic. Sales are currently underway at pier1.com with the website expected to remain operational until July 2020. Deadline for bids for the remaining assets would be July 1, with a July 8 auction date and a July 15 sale hearing.
As for that pesky “Retail Apocalypse” – we’ll keep you posted.
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