Discount retailer Big Lots has filed for Chapter 11 bankruptcy protection, weeks after the discount furniture store said it planned to close hundreds of stores.
Ohio-based 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.
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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.
Which stores will close?
A full list of stores set to closed wasn't immediately released. However, messages on Big Lots' website indicated certain locations were set to close.
Here's which stores are set to close in Illinois, according to the website.
Big Lots Illinois store closings
According to website, there are 28 Big Lots stores in Illinois, with the following stores scheduled for closings:
- Burbank - 8148 S. Cicero Ave.
- Calumet City - 1699 River Oaks Dr.
- Centralia - 1139 W. Broadway
- Crest Hill - 1608 N. Larkin Ave.
- Elgin - 204 S. Randall Rd.
- Fairview Heights - 10850 Lincoln Trl
- Lockport - 340 Summit Dr.
- Niles - 7233 W. Dempster St.
- Oakbrook Terrace - 17x714 W. 22nd St.
