Retailer Pier 1 Taps Debt Restructuring Expert as Chief Executive--Update

By Aisha Al-Muslim and Alexander Gladstone 

Struggling retail chain Pier 1 Imports Inc. has hired a bankruptcy veteran to serve as its new chief executive.

The Fort Worth, Texas-based home furnishings retailer said Monday it named Chief Financial Officer Robert Riesbeck to lead the company.

Mr. Riesbeck, a retail veteran with an accounting background, previously led FullBeauty Brands Inc. and HHGregg Inc., which both underwent chapter 11 proceedings during his tenure.

Mr. Riesbeck served as chief financial officer of plus-size apparel retailer FullBeauty until its bankruptcy filing in February. He also was chief executive of consumer electronics and home appliance chain HHGregg when it filed for chapter 11 protection in March 2017. In addition, he spent about four years at private-equity firm Sun Capital Partners, according to a news release.

Mr. Riesbeck joined Pier 1 as the company's finance chief in July as the chain was working to turn around its business.

Mr. Riesbeck replaces Cheryl Bachelder, the former chief executive of Popeyes Louisiana Kitchen Inc., who had served as interim chief executive officer since December.

Pier 1 has continued to rack up losses despite management touting its plan to control expenses and boost sales. Its most recent sales and margins remained under pressure as it worked to reset its merchandise and marketing for the fall season.

The company reported its fiscal second-quarter loss widened to $100.6 million from $51.1 million for the same period last year, which it primarily attributed to changing the retailer's merchandise assortment and holding more clearances. The retailer's net sales dropped 14% from a year earlier to $304.6 million for the quarter ended Aug. 31, while comparable sales fell 12.6%.

Pier 1 had $190 million outstanding under its senior secured term loan, $50 million of borrowings under its first-in, last-out tranche and $55 million of borrowings under its $350 million revolver, as of Aug. 31. The company had $160.5 million of liquidity at the time.

Earlier this year, S&P Global Ratings slashed Pier 1's credit rating deeper into junk territory, citing the increasing risk of a bankruptcy filing or debt restructuring.

WSJ Pro Bankruptcy in April reported that Pier 1 had been making plans to file for bankruptcy, but that a filing wasn't a certainty if the company could demonstrate a turnaround in the subsequent few months.

Pier 1 said Tuesday the New York Stock Exchange had accepted its business plan to comply with listing standards. A Pier 1 spokesperson said the business plan doesn't contemplate a bankruptcy filing by the company.

"We continue to carefully monitor our liquidity position and believe we have sufficient resources to implement our fiscal 2020 action plan," the spokesperson said. "We also continue to make timely payments to all vendors."

The retailer has brought on a number of restructuring and real-estate advisers, including turnaround firm AlixPartners LLP, law firm Kirkland & Ellis LLP and A&G Realty Partners.

Founded in 1962, Pier 1 has closed several stores as it struggles to return to profitability. As of Aug. 31, the retailer operated 951 stores, a decrease of 38 from a year earlier.

Write to Aisha Al-Muslim at [e-mail] and Alexander Gladstone at [e-mail]

(END) Dow Jones Newswires

November 05, 2019 18:32 ET (23:32 GMT)

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