Big Lots, a retailer specializing in discounted home goods, recently filed for bankruptcy due to slow demand influenced by high interest rates and a sluggish housing market. Following the bankruptcy filing, Big Lots secured court approval to access $550 million out of a possible $707.5 million in bankruptcy financing, as detailed in recent court filings and a company announcement on Wednesday.
Additionally, as disclosed in Big Lots bankruptcy documents, it has arranged to sell its business to Nexus Capital Management. The agreed sale price is approximately $760 million, which includes $2.5 million in cash, along with the assumption of the company’s remaining debts and liabilities.
Key Takeaways
- Bankruptcy Filing and Financing: Big Lots filed for Chapter 11 bankruptcy, securing $550 million out of a potential $707.5 million in financing to continue operations during restructuring. This retail financing will help manage operational costs, including employee wages and vendor payments.
- Asset Sale to Nexus Capital Management: As part of the restructuring, Big Lots plans to sell its assets to Nexus Capital Management for approximately $760 million, which includes the assumption of the company’s debt and liabilities.
- Widespread Store Closures: The company has announced over 550 store closures across 27 states, with the largest impact in California, Texas, Ohio, and Washington. This is part of Big Lots’ efforts to streamline operations and focus on profitable locations.
- Industry Challenges: Big Lots’ financial difficulties stem from reduced consumer spending on non-essential items, high interest rates, and intense competition from other discount retailers, which contributed to its decision to file for bankruptcy.
Big Lots Files for Chapter 11 Bankruptcy Amid Store Closures, Gets Over $700 Million in Financing for Restructuring
Big Lots, a discount retailer headquartered in Ohio, sought Chapter 11 bankruptcy protection in September 2024 following a stretch of financial strain exacerbated by the COVID-19 pandemic, inflation, and elevated interest rates. These conditions led to decreased spending on non-essential items like home goods and seasonal products, which are crucial for Big Lots’ revenue. To maintain operations while reorganizing, Big Lots bargained $707.5 million in bankruptcy financing, which comprises $550 million in debtor-in-possession (DIP) financing and an additional $157.5 million in new term loans.
The retail financing and cash flow from current operations should ensure sufficient liquidity for Big Lots to maintain regular activities, such as compensating employees and settling payments with vendors, during Big Lots bankruptcy proceedings.
CEO Bruce Thorn stated that with the judicial relief obtained and lender support, Big Lots aims to navigate this period and reemerge as a revitalized entity focused on effectively serving its customers.
In the bankruptcy proceedings, Big Lots has secured a preliminary purchase agreement with Nexus Capital Management. Nexus proposes to acquire most of Big Lots’ assets and operations for $620 million, acting as the initial “stalking horse” bidder to set the minimum bid for other potential buyers in a court-managed auction. Should no superior bids emerge, Nexus anticipates finalizing the purchase in the year’s final quarter.
Big Lots’ bankruptcy filing disclosed substantial debt, with liabilities estimated between $1 billion and $10 billion, affecting thousands of creditors. A combination of declining sales, high operational costs, and unresolved losses from the pandemic period led to the retailer’s financial downturn.
The New York Stock Exchange has also alerted the company due to its shares closing below $1 for 30 consecutive trading days. This notification does not imply immediate delisting, as Big Lots can challenge this. In premarket trading, the shares dropped 40% to 30 cents.
In response, Big Lots has significantly reduced its retail footprint. Initially operating over 1,400 stores in 48 states, the company first announced the closure of about 40 stores following a severe financial downturn, which included a 10% sales drop and a quarterly loss of $205 million. In August, facing continued financial challenges and the threat of loan default, Big Lots increased its planned store closures to 315.
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The scale of closures escalated further when Big Lots filed for Chapter 11 bankruptcy protection this month. Initially, 344 stores were slated for closure. Still, this number was expanded to 451 across the U.S. Subsequently, an additional 56 stores were added to the closure list on October 17, raising the total to over 550 store closures distributed across 27 states, with the largest numbers in California, Texas, Ohio, and Washington.
Big Lots has encountered significant challenges stemming from both sector-wide trends and its own strategic errors. The shift in consumer preferences towards online shopping has pressured physical store operations, particularly in the discount retail sector where Big Lots operates. Plus, the company has faced robust competition from other discount retailers like Dollar General and Five Below, which have more effectively adjusted to the evolving market dynamics.
The company’s decision to file for bankruptcy aims to reorganize its debt while it continues to operate, though on a reduced scale. Nexus Capital’s prospective acquisition is anticipated to provide Big Lots with the necessary financial relief. Nexus sees potential in Big Lots and aims to reestablish its position as a prominent player in the discount retail market by implementing cost-reduction strategies, improving inventory management, and possibly enhancing its online offerings.
The restructuring process, including store closures, introduces considerable uncertainty for Big Lots’ workforce, which exceeds 30,000 employees. Many may face job losses as the company plans to downsize its operations and maintain only profitable stores.
In a letter to its business partners, Big Lots outlined recent challenges, including record inflation and high interest rates post-pandemic, which have suppressed consumer spending. The company assured its vendors of full payment for deliveries post-bankruptcy. Furthermore, Big Lots communicated in the letter that Nexus is confident in the company’s business and its potential. With the support from Nexus, Big Lots expects to bolster its long-term performance and profitability.
Big Lots’ Store Closure List (Old and New Updated List)
Here are two tables with the requested columns (state, county, and store address) for the Big Lots stores that have already closed:
Big Lots Stores That Have Already Closed
State | City | Store Address |
Alabama | Troy | 1327 S. Brundidge St. |
Arizona | Flagstaff | 1416 E. Route 66 |
Arizona | Glendale | 17510 N. 75th Ave |
Arizona | Laveen | 3630 W. Baseline Road |
Arizona | Mesa | 2840 E. Main St., Suite 109 |
Arizona | Mesa | 6839 E. Main St. |
Arizona | Peoria | 24760 N. Lake Pleasant Parkway |
Arizona | Phoenix | 2020 N. 75th Ave., Suite 40 |
Arizona | Phoenix | 230 E. Bell Road |
Arizona | Phoenix | 4727 E. Bell Road |
Arizona | Phoenix | 2330 W. Bethany Home Road |
Arizona | Phoenix | 4835 E. Ray Road |
Arizona | Scottsdale | 10220 N. 90th St. |
Arizona | Tucson | 4525 N. Oracle Road |
California | Anaheim | 1670 W. Katella Ave. |
California | Anaheim | 6336 E. Santa Ana Canyon Road |
California | Atascadero | 2240 El Camino Real |
California | Atwater | 1085 Bellevue Road |
California | Bakersfield | 1211 Olive Drive |
California | Bakersfield | 2621 Fashion Place |
California | Beaumont | 1482 E. 2nd St. |
California | Camarillo | 353 Carmen Drive |
California | Canyon Country | 19331 Soledad Canyon Road |
California | Chico | 1927 E. 20th St. |
California | Concord | 2060 Monument Blvd. |
California | Corona | 740 N. Main St. |
California | Culver City | 5587 Sepulveda Blvd. |
California | Delano | 912 County Line Road |
California | El Cajon | 1085 E. Main St. |
California | Fairfield | 1500 Oliver Road |
California | Folsom | 9500 Greenback Lane, Suite 22 |
California | Fresno | 7370 N. Blackstone Ave. |
California | Gilroy | 360 E. 10th St. |
California | Hercules | 1551 Sycamore Ave. |
California | Indio | 42225 Jackson St., Suite B |
California | La Mesa | 6145 Lake Murray Blvd. |
California | Livermore | 4484 Las Positas Road |
California | Lompoc | 1009 N. H St., Suite M |
California | Long Beach | 2238 N. Bellflower Blvd. |
California | Los Banos | 951 W. Pacheco Blvd. |
California | Manteca | 1321 W. Yosemite Ave. |
California | Merced | 665 Fairfield Drive |
California | Milpitas | 111 Ranch Drive |
California | Modesto | 3900 Sisk Road |
California | Oceanside | 1702 Oceanside Blvd. |
California | Ontario | 4430 Ontario Mills Parkway |
California | Placerville | 47 Fair Lane |
California | Rancho Santa Margarita | 30501 Avenida De Las Flores |
California | Redlands | 810 Tri City Center |
California | Riverside | 2620 Canyon Springs Parkway |
California | Rohnert Park | 565 Rohnert Park Expressway |
California | Sacramento | 6630 Valley Hi Drive |
California | Sacramento | 8700 La Riviera Drive |
California | Salinas | 370 Northridge Mall |
California | San Bernardino | 499 W. Orange Show Road |
California | Santa Clara | 3735 El Camino Real |
California | Santa Maria | 1417 S. Broadway |
California | Santa Paula | 568 W. Main St., Suite B |
California | Santa Rosa | 2055 Mendocino Ave. |
California | Simi Valley | 1189 Simi Town Center Way |
California | Stockton | 2720 Country Club Blvd. |
California | Temecula | 27411 Ynez Road |
California | Tracy | 2681 N. Tracy Blvd. |
California | Turlock | 1840 Countryside Drive |
California | Ukiah | 225 Orchard Plaza |
California | Vacaville | 818 Alamo Drive |
California | Visalia | 2525 S. Mooney Blvd. |
California | Woodland | 52 W. Court St. |
New List of 56 Big Lots Store Closures (October 2024)
State | City | Store Address | Pincode |
Alabama | Homewood | 142 Green Springs Hwy | 35209 |
Arkansas | Conway | 150 E Oak St | 72032 |
Arizona | Lake Havasu City | 1799 Kiowa Ave #106 | 86404 |
California | Hesperia | 16824 Main St | 92345 |
California | Reedley | 1201 E Manning Ave | 93654 |
California | Santa Ana | 2727 N Grand Ave | 92705 |
California | Redding | 2685 Hilltop Dr | 96002 |
Colorado | Brighton | 893 S Kuner Rd | 80601 |
Connecticut | Bristol | 1235 Farmington Ave | 06010 |
Florida | Orlando | 751 Good Homes Rd | 32818 |
Florida | Tampa | 14948 N Florida Ave | 33613 |
Georgia | Kennesaw | 4200 Wade Green Rd NW Ste 144 | 30144 |
Georgia | Cartersville | 160 Market Sq | 30120 |
Illinois | Decatur | 1383 E Pershing Rd Ste A | 62526 |
Illinois | Machesney Park | 8750 N 2nd St | 61115 |
Indiana | Franklin | 1538 North Morton St | 46131 |
Indiana | New Haven | 918 W Lincoln Hwy | 46774 |
Indiana | New Albany | 440 New Albany Plz | 47150 |
Iowa | Burlington | 3320 Agency St | 52601 |
Kansas | Shawnee | 7408 Nieman Rd | 66203 |
Louisiana | Lake Charles | 3250 Gerstner Memorial Dr | 70601 |
Maryland | Edgewood | 1815 Pulaski Hwy | 21040 |
Maryland | Waldorf | 1200 Smallwood Dr W | 20603 |
Michigan | Southfield | 29712 Southfield Rd | 48076 |
Michigan | Livonia | 30000 Plymouth Rd | 48150 |
Missouri | Blue Springs | 603 SW US Highway 40 | 64014 |
Missouri | Fenton | 691 Gravois Bluffs Blvd | 63026 |
Nebraska | Fremont | 850 E 23rd St | 68025 |
New Mexico | Albuquerque | 465 Coors Blvd NW | 87121 |
New Mexico | Albuquerque | 9500 Montgomery Blvd NE | 87111 |
North Carolina | Boone | 223 New Market Ctr | 28607 |
Ohio | Westerville | 60 E Schrock Rd | 43081 |
Ohio | Brunswick | 1733 Pearl Rd Ste 125 | 44212 |
Ohio | Highland Heights | 6235 Wilson Mills Rd | 44143 |
Ohio | North Olmsted | 26425 Great Northern Plaza | 44070 |
Oklahoma | Tulsa | 2144 S Sheridan Rd | 74129 |
Oklahoma | Ada | 1200 N Hills Center | 74820 |
Pennsylvania | Philadelphia | 15501 Bustleton Ave | 19116 |
Pennsylvania | Whitehall | 2631 Macarthur Rd | 18052 |
Tennessee | Elizabethton | 791 West Elk Ave | 37643 |
Tennessee | Chattanooga | 2020 Gunbarrel Rd Ste 186 | 37421 |
Texas | Paris | 3512 Lamar Ave | 75460 |
Texas | Texarkana | 2729 New Boston Rd | 75501 |
Texas | Spring | 425 Sawdust Rd Ste A | 77380 |
Texas | Lewisville | 1374 W Main St | 75067 |
Texas | Cedar Park | 850 N Bell Blvd #104 | 78613 |
Texas | Denton | 2249 S Loop 288 | 76205 |
Texas | San Angelo | 4002 Sunset Drive | 76904 |
Virginia | Chesapeake | 4300 Portsmouth Blvd | 23321 |
Virginia | Gloucester | 6571 Market Dr | 23061 |
Virginia | Richmond | 8151 Brook Rd | 23227 |
Washington | Tacoma | 2401 N Pearl St | 98406 |
Washington | Yakima | 120 N Fair Ave | 98901 |
Washington | Vancouver | 11696 NE 76th St | 98662 |
Washington | Kennewick | 3019 W Kennewick Ave | 99336 |
Wisconsin | Janesville | 1800 Milton Ave Ste 100 | 53545 |
About Big Lots
Image source
Big Lots, Inc., is a discount retail company based in North America, operating 1,425 stores in 48 U.S. states as of January 28, 2023. The company is divided into two segments: U.S. and Canada. Its product offerings are organized into several categories: Furniture, Consumables, Seasonal, Home, Hardlines & Other, and Playn’ Wear. The Consumables category comprises health and beauty products, food, paper goods, plastics, pet supplies, and chemicals.
The Furniture category features ready-to-assemble furniture, mattresses, upholstery, and case goods. The Home category includes items like stationery, textiles, and home decor. Seasonal items cover summer goods, Christmas decorations, and other holiday-specific products. Playn’ Wear includes electronics, jewelry, toys, apparel, and infant accessories. Lastly, the Hardlines & Other category offers tools, appliances, paint, and home maintenance products.
Conclusion
Big Lots’ Chapter 11 bankruptcy filing marks a critical point in its history as it grapples with significant financial challenges, including reduced consumer demand and rising operational costs. The company’s secured financing and planned sale to Nexus Capital Management offer a path forward, though it involves substantial downsizing with over 550 store closures.
As the retailer restructures, it aims to adapt to market dynamics, reduce costs, and potentially refocus its business strategy to remain competitive in the discount retail sector. The outcome of these efforts will shape Big Lots’ future in a highly competitive marketplace.