MJP –
Officially declaring Chapter 11 bankruptcy, following earlier suspicions, a large discount retailer is now shuttering more than 500 locations.
Big Lots’ Chapter 11 bankruptcy petition has now been confirmed, ending weeks of mystery.
The company’s stated goal in “optimizing our store footprint” involves the closure of 295 stores as part of the ongoing reorganization.
Furthermore, it is anticipated that approximately 250 additional stores will close their doors by January 15, 2025.
Except for Alaska and Hawaii, Big Lots now have 1,389 locations throughout the contiguous 48 states.
Announcing their plans to “streamline our operations to serve our customers more effectively,” the company said in a press statement, “While most of our locations are profitable.”
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The bankruptcy procedure will equip the business with the means to organize the shuttering of its stores.
Big Lots had previously warned the U.S. Securities and Exchange Commission in a report that 35 to 40 locations could close this year, so this filing is in response to that warning.
Nexus Capital Management LP has placed a “Stalking Horse Bid” to set a minimum price for the company that is now being auctioned off.
Other prospective purchasers will use this first offer as a yardstick.
This auction is expected to accept Nexus’s offer if no better bids are received by October 15th.
Between 5,001 and 10,000 creditors are owed about $3.1 billion by Big Lots.
Across the board, the company’s net sales declined in the first quarter of 2024 compared to the first quarter of 2023, resulting in a $114.5 million reduction.
The company’s home products, which include furniture and seasonal items, have been hit hard by the macroeconomic issues that cut into customers’ discretionary spending, according to Big Lots’ June filings.
With assets of over $3.18 billion, the bargain retailer has been hit hard by soaring inflation and rising borrowing rates, just like many other enterprises on the brink of bankruptcy.
The drop in sales for Big Lots has been exacerbated by changes in customer buying habits.
