Pier 1 Imports on Thursday stated that it received notification from the New York Stock Exchange on Aug. 5 that it is no longer in compliance with the market's continued-listing criteria.
According to the SEC filing, the company’s global market cap was less than $50 million over a 30-day trading period and its shareholders’ equity was also less than $50 million. The company’s global market cap averaged $25 million during the 30 days ended on Aug. 2. Its last reported shareholders' equity was $9.2 million on June 1. According to NYSE rules, Pier 1 could be "subject to immediate initiation of suspension and delisting procedures" if its 30-day average market cap falls below $15 million. On Aug. 2 the retailer's absolute market cap was $14.4 million.
Pier 1 stated in a press release that, per NYSE rules, it will respond within the required 10 days of receiving notice that it will submit a definitive plan within 45 days. If the NYSE accepts the plan the retailer has 18 months to enact a turnaround to raise its stock price.
This month's notice by the NYSE adds another next chapter in the story of a retailer that is fading from view.
The furniture and home goods retailer already ostensibly has a turnaround plan dubbed "New Day," but newly arrived executives earlier this year acknowledged "issues" with its implementation, after the company was downgraded on debt and poor prospects by S&P Global Ratings.
If Pier 1 does not submit a turnaround plan in a timely manner, or if the plan isn't accepted by the NYSE, the stock exchange will start delisting procedures. Even if the company's plan is accepted, the stock exchange will initiate delisting procedures if the retailer hasn't made a "reasonable demonstration" to conform to NYSE guidelines within 18 months.
In June, the company's shareholders agreed to a reverse stock split to regain compliance of $1.00 per share to maintain its listing on the NYSE. It was a tactical move to get the company's stock above the required threshold, but failed to have a lasting impact.
The retailer has also gone through a number of c-suite changes this year. In July the company appointed Douglas Diemoz as president and Robert Riesbeck as CFO, replacing its interim CFO. The company also created an office of the Chief Executive Officer, which includes interim CEO Cheryl Bachelder, as well as Diemoz, Riesbeck and Robert Bostrom, executive vice president, chief legal and compliance officer and corporate secretary.
As Pier 1 struggles, its competition has gained strength. Walmart and Target, taking on Amazon (which has both expanded and refined its furniture and home decor offering) and Wayfair (which has added design services and a membership tier), have sharpened their merchandising in the space, adding new lines and easing online shopping and fulfillment of bulky orders.