The embattled retailer Pier 1 Imports, who we wrote about on April 17 and April 29, reported second quarter 2019 results on September 25, and they were not pretty. One example: comparable store sales dropped (12.6%). As you might expect, the stock price dropped in reaction: by (12%).
Management, though, continues to argue that its turnaround plans will bear fruit and the company will be able to avoid Chapter 11 or equivalent. We have our doubts – as do the two BDCs with exposure, who’ve discounted their debt to the company by (74%) as of IIQ 2019, from (44%) in the prior quarter. (At the moment, based on Advantage Data‘s middle market liquid debt records, the same discounts apply as in June). There’s $1.0mn of annual investment income at risk, held by publicly listed Main Street Capital (MAIN) and non-listed sister BDC HMS Income.