Pier 1 files for bankruptcy protection amid online challenge

Home goods retailer Pier 1 Imports Inc. said Monday that it has filed for bankruptcy protection.

The Fort Worth, Texas-based company, which was founded in 1962, has been struggling with increased competition from budget-friendly online retailers such as Wayfair.

Pier 1 said it will pursue a sale, with a March 23 deadline to submit bids. A hearing is scheduled for Tuesday at the U.S. Bankruptcy Court for the Eastern District of Virginia.

In the meantime, Pier 1 said lenders have committed approximately $256 million in debtor-in-possession financing so it can continue its operations during the Chapter 11 proceedings.

Pier 1 to close up to 450 stores

"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," Pier 1 CEO and Chief Financial Officer Robert Riesbeck said in a statement. Riesbeck, an executive with previous corporate turnarounds, joined Pier 1 last summer.

Pier 1′s sales fell 13% to $358 million in its most recent quarter, which ended Nov. 30. It reported a net loss of $59 million for the quarter as it struggled to draw customers to its stores. Pier 1 has been trying to declutter its stores, improve online sales and draw in younger customers.

Last month, Pier 1 announced it would close 450 stores, including all of its stores in Canada. The company is also closing two distribution centers.

Pier 1′s shares have fallen 45% since the start of the year. They closed at $3.58 per share on Friday.