Discount retail chain Big Lots is declaring bankruptcy as it plans to close hundreds of stores nationwide, including one in Woodbridge in New Jersey.
As part of the Chapter 11 bankruptcy, announced on Monday, private equity firm Nexus Capital Management is acquiring “substantially all” Big Lots stores and business operations. During the process, the website and store locations will remain open for shopping.
“The actions we are taking today will enable us to move forward with new owners who believe in our business and provide financial stability, while we optimize our operational footprint, accelerate improvement in our performance, and deliver on our promise to be the leader in extreme value,” reads a statement on Monday from Big Lots CEO Bruce Thorn.
In a press release, Big Lots blamed economic factors such as “high inflation and interest rates." The Federal Reserve hiked interest rates 11 times since the COVID-19 pandemic to tame inflation as it rose to a 40-year high.
“The prevailing economic trends have been particularly challenging to Big Lots, as its core customers curbed their discretionary spending on the home and seasonal product categories that represent a significant portion of the Company's revenue,” the press release states.
Big Lots stated that it is in the process of closing over 300 of its 1,400 stores nationwide, though no additional closures were announced on Monday.
Nonetheless, Big Lots warned that it would “need to close certain locations to ensure that our business operates efficiently and we can continue serving our customers.”
“Big Lots is not always good value for money,” said Neil Saunders, a retail analyst and managing director of retail at GlobalData. “Many of the items it sells are not high end and are not drastically expensive, but equivalents can often be found much cheaper at other stores, including Walmart.
What happens after a bankruptcy filing?
A bankruptcy does not necessarily mean a company is doomed.
“A Chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time,” according to the U.S. courts website .
“Some companies don’t survive the Chapter 11 process, but many others, including household names such as Marvel Entertainment and General Motors, successfully emerge and thrive,” CFO Magazine added in a 2020 article.
Earlier this year, fashion retailer Express was able to emerge from bankruptcy with its stores intact, as was Joann fabrics and crafts , Rite Aid and Red Lobster .
“Restructuring is only part of the answer,” said Saunders, the retail analyst. “Many of the remedies require a retooling of the proposition and a much better focus on the customer. Big Lots operates in a very crowded and competitive market where other value players do a far better job of delivering on low prices and compelling bargains.”
NJ bankruptcy closings
Union-based Bed Bath & Beyond filed for bankruptcy in April 2023 and closed hundreds of stores in the U.S, including 13 in New Jersey. Last summer, Overstock.com bought the bankrupt retailer’s assets, relaunching BB&B as an online-only presence at bedbathandbeyond.com .
Blink Fitness declared bankruptcy last month and is closing at least one location in New Jersey. LL Flooring also declared bankruptcy and plans to close three New Jersey stores.
Where are Big Lots in New Jersey?
There are 27 Big Lots stores across New Jersey:
The Woodbridge location is based at 471 Green St., sandwich between Route 1 and 9 in a highly trafficked retail corridor. The nearest Big Lots stores are in East Brunswick and Union.
Big Lots did not say why it would close the Woodbridge location, nor did it offer a timeline for a closure.
Daniel Munoz covers business, consumer affairs, labor and the economy for NorthJersey.com and The Record.
Email: munozd@northjersey.com ; Twitter: @danielmunoz100 and Facebook
This article originally appeared on NorthJersey.com: One New Jersey Big Lots store set to close amid bankruptcy announcement
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