Pier 1 said on Monday (Jan. 6) that it intends to close nearly half of its 942 locations, according to CNBC, fueling rumors of bankruptcy as the company releases its quarterly earnings. The company specified that up to 450 Pier 1 stores will be closed. It also plans to shutter some of its distribution centers, and reduce corporate expenses, which will include slashing its corporate headcount.
The decision comes after declining sales and more losses over time. CEO Robert Riesbeck said the fiscal sales and margins remained “under pressure” in Q3. Going forward, he added, Pier 1 believes it can deliver improved earnings results, due to its “business transformation and cost-reduction initiatives.”
Pier 1’s shares were in holding on Monday afternoon as the news broke. Earlier in the day, its shares tanked more than 25 percent, but were halted when the news came out that it could be preparing for bankruptcy. The company’s shares had also been halted for volatility earlier on Monday.
The quarter ended on Nov. 30, and showed that Piers 1’s loss had widened to $59 million, or $14.15 per share. That’s up from a loss of $50.4 million one year ago, translating to $12.49 per share.
The company’s latest loss included $10 million in restructuring that included professional fees. There was also a non-cash charge of $14.1 million for store impairment. Pier 1 said the per-share figures reflected a one-for-20 reverse stock split last June.
Net sales also fell to $358.4 million, a 13.3 percent drop from one year ago.
Same-store sales dropped 11.4 percent, due to declining foot traffic in stores. However, the company said it was looking forward to its Q4 sales being better.
Retail, in general, has been declining in the U.S. for several years now. Last year, it was reported that more than 7,150 store closures had been announced by retailers, including Pier 1 and others, such as Dressbarn, CVS and Party City.