New York, July 19--Standard & Poor's on Monday cut its ratings on Pier 1 Imports to junk status, citing weak operating performance and uncertainty about the success of new marketing efforts.
S&P cut Pier 1's rating by two notches to "BB," the second-highest junk rating, from "BBB-minus." The outlook is stable.
Ratings downgrades to junk can significantly raise borrowing costs. Although Pier 1 has a niche position in value-priced home furnishings, it is facing competition from department stores, as well as discount stores, S&P said in a statement.
