Big Lots Initiates Store Closures Following Failed Sale Attempt – NewNooz

Discount retailer Big Lots has announced the commencement of going-out-of-business sales across its remaining stores. This move comes after the company failed to secure a sale amid its bankruptcy proceedings. The Columbus, Ohio-based retailer, known for offering affordable home furnishings and decor, had initially planned to sell its assets to Nexus Capital Management LP.

After filing for Chapter 11 bankruptcy protection in September, Big Lots intended to transfer the majority of its assets to the private equity firm. However, the deal fell through, prompting the company to seek alternative transaction options. As highlighted by various business outlets, Big Lots aims to complete a new transaction by early January.

Bruce Thorn, Big Lots’ CEO, highlighted the difficulties faced by the company in achieving a going concern sale. He stated that initiating going-out-of-business sales was necessary to protect the company’s estate value. Customers can now access discounts of up to 50% on merchandise both online and in-store.

Big Lots attributes its financial woes to high inflation and interest rates, which have adversely affected consumer spending on home and seasonal products. These categories are integral to the company’s revenue. Furthermore, Big Lots has struggled to compete with retail giants like Walmart and warehouse clubs such as Sam’s Club and Costco.

As of late 2023, Big Lots operated almost 1,400 stores across 48 states, although a precise store count was not immediately available. Despite the challenges, the company continues to serve its customers in-store and online, providing updates as events unfold.

The company had filed for Chapter 11 bankruptcy to initiate a court-supervised sale process, positioning Nexus as the “stalking horse bidder.” Despite this strategic approach, the anticipated sale did not materialize, leading to the implementation of going-out-of-business sales.

Before filing for bankruptcy, Big Lots informed the SEC about plans to close 35-40 stores, but the number of closures quickly escalated. The retailer’s second-quarter performance reflected these challenges, with net sales declining by over 8% and a net loss of nearly $238.46 million.

The situation with Big Lots highlights the broader challenges faced by discount retailers in a competitive market. As the company navigates bankruptcy proceedings and store closures, it continues to adapt to the changing retail landscape and economic pressures.