National Discount Retailer Goes Bankrupt, Future Of 1,400 Stores Unknown

In the wake of giant national brands like Bed, Bath & Beyond, Christmas Tree Shops, and Tuesday Morning declaring bankruptcy and closing all of their locations, another big retailer has just done it as well. National discount home goods chain Big Lots, which has been facing financial challenges lately due to sluggish sales, has declared bankruptcy.

According to Reuters, the company plans to sell its business to a private equity firm unless a higher bidder comes through. What that firm plans to do with it is unknown, as is the fate of all 1,400 Big Lots stores. The deal is set to close by the end of the year.

Big Lots was supposed to have their second-quarter earnings call last week but delayed it until Thursday, September 12. Previous earnings calls hadn't been positive. In the last one, CEO Bruce Thorn called out that his company had lost money for yet another quarter, losing $132.3 million in Q1 of 2024, which is nearly $100 million more than they lost in Q1 of 2023. He explained what happened, saying, "While we made substantial progress on improving our business operations in Q1, we missed our sales goals due largely to a continued pullback in consumer spending by our core customers, particularly in high ticket discretionary items."

He did try to remain positive on that call, focusing on "aggressive actions to drive positive comp sales growth in the latter part of the year and into 2025," but when the company filed their finances with the SEC, they acknowledged their losses in 2022, 2023 and this year, and noted that while they are still in compliance with their credit agreements, they expect "to experience further operating losses" and "difficulty remaining in compliance." They added that there is "a significant likelihood" that in the next 12 months, they "will be unable to comply with the Excess Availability Covenant" of their loan, which "raises substation doubt about the company's ability to continue."

Big Lots employs over 30,000 workers. In the past year, its stock has dropped 90%.