The struggling discount retail chain, which filed for Chapter 11 bankruptcy earlier this year, announced it was unable to secure a deal for its sale.
[Image credit: Brandon Bell/Getty Images]
After a challenging year of store closures and attempts to secure a sale to stay afloat, discount retailer Big Lots has announced plans to close all its stores and go out of business. Here's what you need to know about the company's closure.
What Happened?
On Thursday, Big Lots issued a statement revealing its intention to shut down all remaining stores and begin going-out-of-business sales. This decision follows the collapse of a potential deal with Nexus Capital Management, leaving the company without a lifeline to continue operations.
Big Lots had been negotiating with Nexus Capital Management for a sale that could have saved the struggling retailer. However, 2024 proved to be a particularly tough year for the company, with inflationary pressures cutting into profits and leading customers to reduce spending on discretionary items—the core of Big Lots's business.
The financial strain forced the company to close numerous stores over the summer. By September, Big Lots filed for Chapter 11 bankruptcy protection in a bid to reorganize its finances, but those efforts have now come to an end.
In recent months, Big Lots had been working on an asset purchase agreement with Nexus Capital Management, but that deal has now fallen through.
In its statement announcing the start of going-out-of-business (GOB) sales, Big Lots did not explain why the sale to Nexus Capital Management failed. However, Bloomberg reports that a valuation appraisal of the company’s inventory fell below expectations, making the deal financially unviable for Nexus Capital Management.
Is There Any Hope for Big Lots?
There’s a slim chance. While announcing the GOB sales, Big Lots CEO Bruce Thorn stated, “While we remain hopeful that we can close an alternative going concern transaction, in order to protect the value of the Big Lots estate, we have made the difficult decision to begin the GOB process.”
An “alternative going concern transaction” refers to a sale to another buyer. Some Big Lots stores could still be saved if such a deal is finalized. The company noted that a sale could still happen, potentially with Nexus or another party, and aims to complete any deal “by early January.”
Despite this hope, Big Lots is not delaying its store closures.
When Will the Going-Out-of-Business Sales Start?
Sales are expected to begin soon. Big Lots stated that all remaining stores will start GOB sales “in the coming days to protect the value of its estate.” The company currently operates around 870 locations.
What About Big Lots Employees?
Big Lots has not commented on the impact its store closures will have on employees. Bloomberg estimates the company’s workforce at approximately 27,000. Unfortunately, the majority of these employees are expected to lose their jobs once the going-out-of-business sales are completed.
Big Lots’ Stock Price Collapsed in 2024
Given the company’s financial struggles, its stock price has suffered a dramatic decline this year. Previously traded on the New York Stock Exchange under the ticker “BIG,” the stock is now listed on the over-the-counter exchange OTCPK with the ticker “BIGGQ.”
As of yesterday’s market close, BIGGQ shares were trading at just 8 cents, marking a staggering year-to-date decline of nearly 99%.
A Brief History of Big Lots
Founded in Columbus, Ohio, in 1967 as Consolidated International, Inc., the company rebranded to Big Lots in 2001. This year, it marked its 57th anniversary.
0 Comments