Amid ongoing financial struggle, Big Lots has announced further store closures as it continues through bankruptcy proceedings.
According to Daily Mail, the retailer, known for discount shopping, is shuttering more outlets, aiming for a total closure of around half of its existing locations.
Headquartered in Ohio, the company initially planned to close approximately 555 of its roughly 1,100 stores after filing for Chapter 11 bankruptcy in September. It has already permanently closed more than 270 outlets and scheduled additional closures in various states, including California, Texas, and Florida.
Big Lots is awaiting court approval for its pending sale to Nexus Capital Management, an investment firm that will potentially determine the fate of the remaining stores. Depending on the outcome, Nexus may close more outlets or keep some operational under new management.
The sale to Nexus Capital Management is seen as a crucial step for Big Lots in maintaining some operationality while under financial duress. The company has managed to secure significant funding, amounting to $707.5 million, to support its operations during these challenging times.
While the company prepares for a change in ownership, it has not stepped back from engaging with its customer base. In anticipation of the holiday season, Big Lots announced it would maintain special operating hours on Thanksgiving and launch a “Black Friday Friday’s” sales event starting December 6. This move signals a robust strategy to attract shoppers and clear out inventory as part of the closures.
Additionally, Big Lots has introduced a new shopping app aimed at enhancing the customer experience. This app launch aligns with efforts to adapt to changing retail environments and consumer preferences, even as the retailer struggles financially.
The effects of these closures stretch beyond the immediate regions, impacting employees and local economies. Some of the closed locations have been auctioned to other discount retailers like Ollie's Bargain Outlet and Burlington, which may provide some relief by filling the vacuum left by Big Lots and potentially retaining jobs.
According to Neil Saunders, head of retail at GlobalData, the path to bankruptcy was seemingly inevitable for Big Lots, citing "16 consecutive quarters of sales declines" and a value proposition that "undermines the retailer’s key point of differentiation."
The bankruptcy of Big Lots is not an isolated incident but part of a larger trend that has seen 21 major U.S. retail and restaurant chains file for bankruptcy this year. This trend marks the highest number since the wave of filings during the pandemic-affected 2020.
In a statement to Nexstar, Big Lots mentioned, "We continue to evaluate store closings in light of lease renegotiations and other considerations, and remain committed to keeping our customers informed as we move forward." This ongoing dialogue with consumers highlights the store's efforts to maintain transparency during its restructuring process.
This phase of restructuring through bankruptcy and pending acquisition places Big Lots in a precarious but hopeful position. The outcome of court proceedings and the completion of the acquisition will ultimately dictate the future landscape for the company and its stakeholders.
For now, Big Lots is focusing on maximizing the impact of its remaining stores during the upcoming holiday season, hoping these efforts will provide a buffer against the financial challenges of bankruptcy proceedings.
