Discount retailer Big Lots filed for bankruptcy on Sept. 9 after announcing last month that it would close 300 stores in an effort to remain in business.
The struggling retailer announced it had secured $707.5 million in financing to maintain operations and support selling its business to private equity firm Nexus Capital Management. This comes as the company began bankruptcy proceedings under Chapter 11.
Bruce Thorn, president and CEO of the company, said in a press release, “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.”
As part of its bankruptcy filing, Nexus is purchasing “nearly all” of Big Lots’ stores and business operations. Throughout this process, its stores and website will continue to remain open for customers.
Evan Glucoft, Nexus managing director, said, “We are excited to have the opportunity to partner with Big Lots and help return this iconic brand to its status as America’s leading extreme value retailer. The Big Lots business has incredible potential and we are confident that its greatest days are ahead.”
In recent months, Big Lots raised “substantial doubt” about the company’s ability to continue in a U.S. Securities & Exchange Commission (SEC) filing.
The company said that although it has implemented several strategic initiatives since the pandemic to enhance sales and improve its long-term performance and profitability, it has still been negatively impacted by macroeconomic conditions beyond its control, such as rising inflation and interest rates.
These economic challenges have been especially tough for Big Lots, with the press release saying its core customers have cut back on discretionary spending, particularly in home and seasonal product categories, which are key drivers of the company’s revenue.
The 57-year-old company is currently closing around 300 of its 1,400 stores across the United States and may close additional stores.
Traditional brick-and-mortar stores have been hit hard as customers continue to cut back on spending on non-essential items while online giants like Amazon thrive.
Big Lots is the latest in an increasing number of well-known retailers facing financial difficulties.
Conn’s HomePlus, a 134-year-old retailer specializing in furniture and electronics, filed for bankruptcy and is closing all of its stores. Bob’s Stores and 99 Cents Only Stores also went out of business earlier this year.