Discount retailer Big Lots filed for bankruptcy on Monday, adding to a growing cadre of retailers adjusting their business models after a post-pandemic boom didn’t stick.
Big Lots agreed to sell its business to Nexus Capital Management, a private equity firm. The retailer said it has secured $707.5 million in financing “to see the company through the restructuring and sale process,” according to the Wall Street Journal. The deal is subject to potential better bids, and if Nexus’s is the winning offer, the transaction will close in the fourth quarter of 2024, Big Lots said.
“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.
The Columbus, Ohio-based company cited a number of “recent macroeconomic factors” for its filing, including “high inflation and interest rates that are beyond its control.”
In a statement, the company noted that “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.”
Big Lots, which operates nearly 1,400 stores across the US, previously announced in an August regulatory filing that it planned to close as many as 315 stores. Now, the company said that “as part of the court-supervised sale process,” it will continue to “assess its operational footprint, which will include closing additional store locations.”
A growing number of companies have filed for bankruptcy this year: The number of commercial Chapter 11 bankruptcies filed in the first half of 2024, a total of 3,016, marked a 34% increase from the same period last year, according to Epiq AACER, a bankruptcy information services platform.
Some big names are on 2024’s bankruptcy list, including Red Lobster and Rubio’s. Now, Big Lots is another one of those big names.
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