OHIO (AP) – Discount retailer Big Lots has filed for Chapter 11 bankruptcy protection, as it contends with a pullback in consumer spending and soft sales.
Join our WhatsApp groupSubscribe to our Daily Roundup Email
The Columbus, Ohio-based company plans to sell its assets and ongoing business operations to private equity firm Nexus Capital Management.
Big Lots, which sells furniture, home decor and other items, said in a statement on Monday that high inflation and interest rates have hurt its business as consumers have pulled back on their home and seasonal product purchases, two categories the chain depends on for a significant part of its revenue.
Sales at stores open at least a year, a key gauge of a retailer’s health, have declined for nine straight quarters, according to FactSet.
Big Lots said that its performance has been improving, but that its board determined during a strategic review that the proposed sale to Nexus was the right move for the business. The company had postponed the release of its second-quarter results to later this week.
The company will continue to sell goods at its stores and on its website during the court-supervised sale process. The chain added that it does plan to close some stores, but didn’t specify how many or what locations would be impacted. At the end of 2023, Big Lots operated nearly 1,400 stores in 48 states.
“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,” Big Lots President and CEO Bruce Thorn said in a statement.
Nexus Capital will serve as a “stalking horse” bidder in a court-supervised auction, with the proposed sale subject to higher offers or other bids that could be considered better. If Nexus winds up as the winning bidder, the deal is anticipated to close in the fourth quarter.
Neil Saunders, managing director of GlobalData, said in an emailed statement that Big Lots seems to have lost some customers at a time when consumers are comparing prices more.
“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. It needs to step up its game if it is to succeed post-bankruptcy,” he said.
Big Lots Inc. has secured commitments for $707.5 million of financing, including $35 million in new financing from some of its current lenders. Once approved by the court, the financing, along with cash from its ongoing operations, is expected to provide sufficient liquidity to support the company while it works to complete the sale.
The chain has also received a notice from the New York Stock Exchange because the average closing price of its shares was below $1 over a consecutive 30 trading-day period. The notice doesn’t mean that Big Lots’ stock will be immediately delisted as the company can appeal. In premarket trading shares slid 40% to 30 cents.
Biden-Harris regime economic policy at work. Elect Kamaltoe for more.
They just keep shuttering and closing all over the country, big name, no name, thousands of retailers going down. Inflation, theft, crime, etc. Pharmacies with locked shelves so that one must ring for sales people, it’s getting worse by the second. Joy, Joy! .. Kamela & media at DNC convention. Joy, happiness, exciting.
Not to defend the demented President administration’s economic policies, but such retail bankruptcies may have a lot to do with rapidly changing shopping patterns. Most of what my wife and I buy these days, i.e. just about everything other than food and clothes one must try on before buying, we get online. It’s the same with everybody we know, and I am sure it’s not so different from all of you. And why should it be? With online retailers’ superior selections, generous return/exchange policies, much better prices and, most importantly, the convenience of ordering in minutes and having it at your door in 1-3 days, I don’t see any future for brick-and-mortar retail stores.
US Govt shutdown will happen on SEPT 30 with MAGA pushing attachments that have NO WAY to pass. A shutdown won’t help Trump. But they can’t help themselves.