Big Lots files Chapter 11 Bankruptcy with plans to close locations

( WJET/WFXP ) — Popular discount retailer Big Lots has officially filed for Chapter 11 Bankruptcy Protection. As part of the bankruptcy and restructuring of the company, 295 stores have already begun to close their doors in what Big Lots says is “optimizing our store footprint”.

“Though the majority of our store locations are profitable, we intend to move forward with a more focused footprint to ensure that we operate efficiently and are best positioned to serve our customers,” said Big Lots President and CEO Bruce Thorn in a press release. “To accomplish this, we intend to use the tools afforded by this process to continue optimizing our store fleet in an orderly manner.”

According to court documents, 295 stores have already commenced closing sales since July 2024. Big Lots plans to initiate subsequent waves of store closings in the coming months. At this time, there is no specific number of stores that will be closed in total, as it will depend on the progress of negotiations with landlords. It is also noted that, as a result of the closures, a large number of employees will be terminated.

During and after this process, Big Lots will continue to serve customers at their nearest store location or online at biglots.com . Big Lots will also continue to honor both gift cards and store credit cards.

The filing comes just months after the company warned in a U.S. Securities & Exchange Commission (SEC) filing that between 35 and 40 locations could shutter this year . In July 2024, the Company initiated a first wave of store closing sales, which continued with a second wave of closings in August 2024. Also in July, Big Lots increased the number of stores in which Big Lots is permitted to close from 150 to 315.

Big Lots has entered into a sale agreement with Nexus Capital Management LP in a “Stalking Horse Bid.” This bid is the initial bid on the company which sets the baseline against other buyers’ offers. If the auction receives bids lower than the “Stalking Horse” price or fails to attract any other bidders, the “Stalking Horse Bid” is normally declared the winner. The deadline to submit bids is October 15.

According to court documents, the company currently holds just under $3.1 billion in debt to anywhere from 5,001 to 10,000 creditors. They also state that the company currently holds $3.18 billion in assets. The company has promised to ensure that all vendors will be paid in full and expects to have enough money to meet business obligations during the process.

As is the case with the growing number of companies filing for bankruptcy, the company has been hit hard by recent macroeconomic factors including high inflation and interest rates. The company also notes the major shift in customer spending trends with many customers either delaying or avoiding discretionary spending.

While the company says that its performance has been improving, after the board of directors reviewed the situation they decided that a court-supervised sales process would be the best path to maximize value and ensure operations are uninterrupted.

Big Lots currently has 1,389 locations across 48 states (only Alaska and Hawaii are without stores). The Columbus, Ohio-based company began in 1967 , but it wasn’t until 2001 that all of its store names switched to Big Lots.

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