Pier 1 Imports Inc. shares sank 23.6% in Tuesday buying and selling after the home-décor retailer introduced it might shutter as much as 450 shops, whereas Moody’s thinks a chapter may very well be on the best way.
Pier 1 PIR, -8.31% mentioned it had a third-quarter web lack of $14.15 per share, same-store gross sales fell 11.4%, and gross sales have been down 13.3% to $358.Four million. The corporate mentioned it had 936 shops.
Along with the store-count discount, Pier 1 plans to put off staff. The struggling retailer has employed a third-party liquidator to assist with the shop closures.
“Wanting forward, we imagine that we are going to ship improved monetary outcomes over time as we notice the advantages of our enterprise transformation and cost-reduction initiatives,” mentioned Robert Riesbeck, who serves as each Pier 1’s chief government and chief monetary officer.
Moody’s isn’t so certain.
“As Pier 1’s losses deepen, the deliberate large-scale retailer closures and value cuts will doubtless be inadequate to show across the enterprise in time to deal with the corporate’s looming debt maturities, making restructuring or chapter extremely doubtless situations,” mentioned Raya Sokolyanska, a Moody’s vp. “Growing competitors within the sector from on-line gamers, mass retailers and off-price retailers is compounding Pier 1’s already difficult turnaround.”
Riesbeck was named CEO in November. He has expertise working with corporations which have filed for chapter together with plus-size retailer FullBeauty and consumer-electronics chain HHGregg.
Like many different areas of retail, the house class has been disrupted by a shift to e-commerce, with competitors from the likes of Amazon.com Inc. AMZN, +0.54% having an impression.
One other residence retailer, At House Inc. HOME, +0.09% , additionally had what Wells Fargo analysts referred to as in a Tuesday observe “a 12 months to overlook” in 2019 after “a sequence of execution missteps, tariff-driven pressures, and a adverse inflection in comps and margins.”
At House shares are down 75% over the previous 12 months.
Pier 1 has been in regular decline for a while, saying in June 2019 that it might shut a complete of 57 shops. At the moment, KeyBanc Capital Markets mentioned the downward trajectory of the corporate put it in danger for liquidation.
Pier 1 inventory has tumbled 64.5% during the last 12 months, whereas the benchmark S&P 500 index SPX, -0.16% has gained 27% in that interval.