Ohio: Big Lots, the once-prominent discount retailer, is set to close its remaining 963 stores nationwide after a deal to save the company fell through. The announcement marks a somber chapter for the 57-year-old retailer, which has struggled against shifting consumer behaviors and economic challenges.
Failed Rescue Deal
In September, Big Lots revealed its intention to sell “substantially all” of its assets to private equity firm Nexus Capital Management. However, as of Thursday, the company stated it no longer expects the transaction to proceed.
To preserve its remaining value, Big Lots will initiate “going out of business” sales at all its remaining locations in the coming days. Despite this, the retailer remains open to alternative solutions, including negotiating with Nexus or another buyer, with hopes of completing a deal by early January.
CEO Bruce Thorn expressed the difficulty of the decision:
“We have worked extremely hard and have taken every step to complete a going concern sale. While we remain hopeful, we have made the difficult decision to begin the [going out of business] process.”
Economic Pressures to Blame
Big Lots cited several economic factors contributing to its bankruptcy, including:
- High inflation: Rising prices have shifted consumer priorities.
- Interest rates: Increased borrowing costs have placed pressure on both consumers and businesses.
- Changing shopping habits: Customers are seeking value but not necessarily at discount retailers, favoring giants like Walmart and Amazon.
The retailer’s struggles reflect broader industry trends, with dollar stores also facing challenges amid evolving consumer behavior.
Declining Footprint
At its peak, Big Lots operated over 1,400 locations across the U.S. However, the company has been gradually closing hundreds of stores throughout 2023. The retailer filed for Chapter 11 bankruptcy protection earlier this year, citing “substantial doubt” about its ability to continue operations.
In a regulatory filing, Big Lots warned of a potential default on a 2022 loan, which has compounded its financial difficulties.
What’s Next for Big Lots?
As liquidation sales begin, the future of Big Lots remains uncertain. The company’s leadership is exploring every avenue to secure an alternative sale and preserve the value of its estate. For now, shoppers can expect significant discounts as the retailer winds down operations at its remaining locations.
