Big Lots files for bankruptcy after facing financial problems due to falling spending on household goods

The discount retail chain Big Lots declared bankruptcy on Monday, following months of warnings about its financial survival.

CEO Bruce Thorn stated that the bankruptcy will allow the company to move forward with new owners who can provide financial and operational stability.

During the bankruptcy process, Nexus Capital Management will acquire the majority of Big Lots’ stores and operations, according to court documents.

Big Lots’ stores and website will remain open during the process, ensuring customers continue to have access to products.

Big Lots is the latest retailer to declare bankruptcy, joining companies like Conn’s Inc. and LL Flooring Holdings Inc.

Big Lots has faced financial difficulties since the COVID-19 pandemic, due to declining sales and macroeconomic issues such as high inflation.

Nexus will act as a «stalking horse bidder» in the court-supervised auction, with the deal expected to close in the fourth quarter of 2024.

Big Lots operates around 1,400 stores across the United States and employs over 30,000 workers, many of whom could be affected.

The chain warned that it will need to close some of its stores to ensure operations remain efficient and profitable in the future.

Big Lots has already secured $707.5 million in financing to continue operations and pay employees and suppliers during the bankruptcy process.

The company explained that shifts in consumer habits, where customers seek value but not just low prices, have impacted its revenues.

Consumers are also spending less on home goods, which represent a significant portion of Big Lots’ income.

The company stated that current economic trends have been particularly challenging, contributing to its financial decline in recent months.

These businesses also faced declines in home goods sales, forcing them to close their doors after decades of operation.

The restructuring of Big Lots could allow the chain to continue operating under new management, improving its profitability and long-term stability.

The future of Big Lots will depend on the company’s ability to adapt to macroeconomic challenges and changes in consumer preferences.

As the process moves forward, the company hopes that the sale to Nexus and operational optimization will lead to financial recovery and sustainability.

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