Pier 1 announced Monday that it began Chapter 11 bankruptcy proceedings in Virginia and that it is pursuing a sale of the company.

The home furnishings chain said in a release that it filed for bankruptcy in the U.S. Bankruptcy Court in Richmond, Virginia, after warning in less than two months ago about its business operations in 2020.

The company said in its Monday announcement that it plans to use this process to complete the previously announced closure of up to 450 store locations, including the closure of all its stores in Canada to help stanch its cash burn.

The company added that it's in talks with multiple potential buyers that could acquire the retailer out of bankruptcy and that it expects, pending court approval, the deadline to submit qualified bids will be on or around March 23.

"Today's actions are intended to provide Pier 1 with additional time and financial flexibility as we now work to unlock additional value for our stakeholders through a sale of the Company," Pier 1 CEO Robert Riesbeck said in a press release.

"We are moving ahead in this process with the support of our lenders and are pleased with the initial interest as we engage in discussions with potential buyers," he added. Pier 1 equity has lost more than 80% of its value over the last 12 months amid growing concerns about its cash flow and continued ability to operate.

To date, the Company has closed or initiated going-out-business sales at over 400 locations and is in the process of closing two distribution centers. Pier 1's online store continues to operate as normal.

Prior to filing Chapter 11, Pier 1 said it entered into an agreement with the majority of its term loan lenders and secured commitments of approximately $256 million in debtor-in-possession financing from Bank of America, Wells Fargo, and Pathlight Capital.

Following court approval, the company expects that funding, combined with its own cash, to provide enough liquidity to support reduced operations and its sale process. Riesbeck, known on Wall Street for his ability to turn around company financials, replaced Cheryl Bachelder as CEO in November.

But Pier 1's bankruptcy announcement on Monday was far from unexpected following sales declines for nine consecutive quarters and outsized debt load.

The company listed $189.5 million outstanding under a senior secured term loan, $50 million of borrowings under a first-in last-out tranche and $96 million of borrowings under a $350 million revolving credit facility as of Nov. 30. It said it had $158.5 million remaining available for cash borrowings.

— CNBC's Lauren Thomas contributed reporting.