Pier 1 Imports will furlough 65% of its home office staff as the effects of the COVID-19 pandemic weigh heavily on the struggling retailer. The company also will reduce wages by 20% for its remaining workers, rising to a 30% decline in compensation for SVPs and a 50% drop for EVP titles and above. The pay decreases will remain in place for an undetermined amount of time.
“Like many retailers that have temporarily closed stores in response to COVID-19, we are making difficult decisions that are necessary to preserve value in our business for the long-term benefit of our associates, customers and other stakeholders,” said Robert Riesbeck, CEO and CFO of Pier 1 in a statement. “We are incredibly grateful to our associates for their commitment to our customers and our company, and we will continue to take appropriate actions to position Pier 1 for the future.”
Pier 1 will continue normal operations for its e-Commerce business, and the company plans to reopen its offices and stores once government and official health guidelines determine it is safe to do so.
The COVID-19 outbreak came at a particularly bad time for Pier 1: the company filed for Chapter 11 bankruptcy to seek a buyer in mid-February, a process that could be hindered by the wider retail downturn caused by social distancing. The deadline for bids was March 23.
Pier 1 followed a long road to bankruptcy, culminating in a dismal Q3 2019 that saw comparable sales fall 11.4% and net sales plummet 13.3%. As a result, the retailer announced intentions to close 450 of its 942 stores and cut costs across the chain to help the company cope with its $258.3 million in long-term debt. Pier 1 also dismissed 300 headquarters employees prior to this week’s temporary layoffs.