Big Lots officially files for bankruptcy after weeks of rumors and reveals 545 locations will close down for good
By Maya Lanzone,
2024-09-09
AFTER a series of financial troubles, Big Lots has officially filed for Chapter 11 bankruptcy.
The discount retailer is shuttering hundreds of locations as the bankruptcy process ensues.
A Big Lots location in Los Angeles, California, in September 2024 Getty Images - Getty A shopper and sale signs in a Big Lots store in Hallandale Beach, Florida, in August 2024 Alamy
After weeks of rumors, Big Lots has officially confirmed it is undergoing Chapter 11 bankruptcy.
As part of the process, 295 locations have initiated closing down in what Big Lots calls “optimizing our store footprint.”
Around 250 additional stores will be shuttered before January 15, 2025.
Big Lots has 1,389 locations across 48 states, with only Alaska and Hawaii lacking stores.
Big Lots president and CEO Bruce Thorn spoke out on the retailer’s plans.
As part of the bankruptcy process, Big Lots has already begun closing hundreds of locations The U.S. Sun
“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,” he shared 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.”
The bankruptcy filing comes months after Big Lots warned in a US Securities & Exchange Commission filing that 35 to 40 of its stores could close this year.
Big Lots is currently up for auction, and Nexus Capital Management LP has submitted a “Stalking Horse Bid” for the company.
Nexus’s initial bid on the company sets a minimum price for the sale and serves as a benchmark other potential buyers must surpass.
If no other bidders come forward in the auction or if their offers are lower than Nexus’s bid, the “Stalking Horse” will likely be accepted.
The deadline for submitting bids on Big Lots is October 15.
FINANCIAL WOES
According to court documents, Big Lots has accumulated around $3.1 billion in debt owed to 5,001 to 10,000 creditors .
The company’s net sales decreased by $114.5 million from the first quarter of 2023 to Q1 of 2024.
Big Lots bankruptcy fears
Big Lots has warned that it may have to close up to 40 locations this year.
The discount retailer spoke out about its financial struggles in its recent regulatory filing .
“In 2024, we currently expect to open three stores and close 35 to 40 stores,” Big Lots bosses wrote.
But questions remain about its “current cash and liquidity projections,” according to the filing.
There is “substantial doubt about the company’s ability to continue as a going concern,” according to the court docs.
Big Lots operates more than 1,300 stores across 48 states and it’s based in Columbus, Ohio .
“The company has incurred net losses and used cash in operating activities in 2022, 2023, and the first quarter of 2024,” the chain wrote.
The retailer blamed its financial problems on “ongoing negative [economic] factors” amid declining sales.
But there was hope for a turnaround by slashing costs, and growing sales.
“The company intends to vigorously pursue its plans to enhance its liquidity [and] improve the performance of the business,” court docs said.
Big Lots hopes to save the firm by cashing in on some of its property, through the “outright sale, or sale and leaseback opportunities.”
“In the first quarter of 2024, we experienced decreased comps and net sales in all of our merchandise categories,” shared Big Lots in its June filings.
“Our home products categories, which include Furniture, Seasonal, Soft Home, and Hard Home, continue to be negatively impacted by macroeconomic pressures affecting our customers’ discretionary spending in the first quarter of 2024.”
The discount chain has approximately $3.18 billion in assets.
Like many other companies filing for bankruptcy, Big Lots has struggled under macroeconomic pressure.
Shifts in consumer discretionary spending have also dampened Big Lots’s sales.
As shoppers spend less money on non-essentials, furniture retailers such as Z Gallerie and Mitchell Gold + Bob Williams have suffered and filed for bankruptcy in the past year.
I’m almost 40 and can say almost every Big Lots store I’ve been inside for 30 of those years has been gross and dirty. There are some good deals on things and it is a good store for holiday shopping. You won’t find the big gifts you want for your kids, but you can find some good stocking stuffer type gifts. With Amazon and Walmart both selling the same things for cheaper or same price and delivering it for free I’d you spend enough or have a membership it’s no wonder stores like Big Lots are shutting down.
Mel H
09-10
damn, I gotta go get a lot of their French fry seasoning then. been eating it for years. I season my beans with it!!
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