Pier 1 Imports on Monday said that it received notification from the New York Stock Exchange on Jan. 11 that it's no longer in compliance with NYSE continued listing criteria requiring an average closing share price of at least $1.00 over a 30 trading-day period.
"In accordance with NYSE rules, Pier 1 has a period of six months from receipt of the notice to regain compliance with the NYSE's minimum share price requirement, with the possibility of extension at the discretion of the NYSE," the retailer said in a press release. Pier 1's common stock will continue to be listed and traded on the NYSE during this period, according to the release.
The company plans to notify the NYSE within 10 business days of its intent to cure the deficiency, and measures to regain compliance could include a reverse stock split, subject to shareholder approval, according to the release. The notification doesn't affect Pier 1's business operations or its Securities and Exchange Commission reporting requirements, and doesn't conflict with or cause default of its material debt or other agreements.
Pier 1 is entering the New Year in dire straits, on the hunt for a new chief executive and a way out of a major sales slump.
The furniture and home goods retailer last month reported a third quarter net sales decline of 11.9% year over year as store comps tumbled 10.5%, even with a benefit of about 600 basis points thanks to a shift of certain holiday selling days into the calendar. Around that time the company also said that board member Cheryl Bachelder would take over for CEO Alasdair James, who had arrived in 2017 in what, at the time, seemed like a smooth, planned transition, but with signs of trouble already emerging.
Since then, the retailer's challenges have only grown even as its competition has gained strength, and its troubles last month helped land it on Retail Dive's list of possible bankruptcies. Meanwhile, Walmart and Target, as part of their efforts to take on Amazon (which has both expanded and refined its furniture and home decor offering), as well as Wayfair (which has added design services and a membership tier), have sharpened their furniture and home goods merchandising, adding new lines and easing online shopping and fulfillment of bulky orders.
The company is evaluating its store fleet (Pier 1 shuttered 24 stores in the past year), but conversion in stores is healthy once shoppers enter them, executives said last month.
Despite that, and despite finances that are in good order, the retailer's third quarter results reveal how challenging its turnaround will be, according to Moody's Investors Service analysts. "While Pier 1 has adequate near-term liquidity, including no maturities until 2021 and ample revolver capacity, the third quarter declines reflects continuing challenges in executing its turnaround strategy — particularly in a strong consumer spending cycle," Moody's Senior Analyst Raya Sokolyanska said in comments emailed to Retail Dive last month.