American retailer Pier 1 Imports, Inc. struggled to stay solvent, leading to filing for Chapter 11 bankruptcy protection. CreditRiskMonitor's FRISK® score identified Pier 1's troubles months beforehand:
This Bankruptcy Case Study will focus on the factors which facilitated the decline of this struggling home furnishings company. Pier 1's sales and profits have slumped in recent years. Its revenue fell from nearly $1.9 billion USD in 2016 to $1.4 billion last year, with the company losing $310 million in 2019.
Pier 1 listed assets and liabilities of more than $500 million in its filing in U.S. bankruptcy court in Richmond, Va. Now in talks with multiple potential buyers, the company is requesting that the court set Mar. 23, 2020 as a deadline for bids to be accepted.
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Our FRISK® score model incorporates four powerful risk inputs:
- “Merton”-type model of stock market capitalization and volatility
- Financial ratios, including those used in the Altman Z”-Score Model
- Bond agency ratings from Fitch, Moody's, and DBRS Morningstar
- Website click pattern data from CreditRiskMonitor® subscribers, representing key credit decision-makers at nearly 40% of current Fortune 1000 companies plus thousands of other large companies worldwide
Since the start of 2017, the FRISK® score’s rate of success in capturing public company bankruptcy is 96%. In any given year, you can count on one hand the times we miss – and in those outlier cases, the circumstances deal with unusual, unforeseen events such as natural disasters and CEO fraud.
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About Bankruptcy Case Studies
CreditRiskMonitor® Bankruptcy Case Studies provide post-filing analyses of public company bankruptcies. Our case studies educate subscribers about methods they can apply to assess bankruptcy risk using our proprietary FRISK® score, robust financial database, and timely news alerts.
In nearly every case, a low FRISK® score gave our subscribers early warning of financial distress within a one-year time horizon. Our proprietary FRISK® score predicts bankruptcy risk at public companies with 96% accuracy. The score is formulated by a number of indicators including stock market capitalization and volatility, financial ratios, bond agency ratings from Moody’s, Fitch and DBRS, and crowdsourced behavioral data from a subscriber group that includes nearly 40% of the Fortune 1000 and thousands more worldwide.
Whether you are new to credit analysis or have decades of experience under your belt, CreditRiskMonitor® Bankruptcy Case Studies offer unique insights into the business and financial decline that precedes bankruptcy.