Big Lots filing for Chapter 11 bankruptcy, announces new ownership

COLUMBUS, Ohio (WKBN) — Big Lots voluntarily filed for Chapter 11 bankruptcy on Monday and has announced restructuring plans and new ownership. Chapter 11 is a form of bankruptcy that involves the court-supervised reorganization of a debtor’s assets and liabilities.

The discount retailer has entered into a sale agreement with an affiliate of Nexus Capital Management LP. In order to make this transition, Big Lots, together with each of its subsidiaries, initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware.

The agreement is a “Stalking Horse Bid,” meaning 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.

In a press release, the company cites challenges since the pandemic, current consumer spending trends, and “recent macroeconomic factors such as high inflation and interest rates that are beyond its control” as reasons for the filing but claimed the company’s underlying performance has been improving.

“We are proud of the work we do every day across Big Lots to provide our customers with unmistakable value and exceptional savings, as well as building stronger communities through our philanthropic efforts,” Big Lots President and CEO Bruce Thorn said in the release. “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.”

The bankruptcy filing comes after the company announced it would close between 35 and 40 stores this year but add three new locations, according to a U.S. Securities & Exchange Commission (SEC) filing in June. During the first quarter of 2024, the company reported $1 billion in sales, a 10.2% decrease compared to the same period last year.

According to court documents, Big Lots is over $3 billion in debt to its 5,000 to 10,000 creditors. The company currently holds between $1-10 billion in assets.

Big Lots currently has 1,389 locations across 48 states. The Columbus, Ohio-based company began in 1967 , but it wasn’t until 2001 that all of its store names switched to Big Lots. Locations around the Ohio Valley include Bridgeport, Ohio, Moundsville, West Virginia- and Wintersville, Ohio.

The company says it will continue to serve customers in-store and online throughout this process.

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