Big Lots has confirmed the closure of its remaining 963 stores just three months after filing for bankruptcy. The decision comes after a potential deal with private equity firm Nexus Capital Management LP fell through, according to a press release issued Thursday.
Nexus was initially expected to acquire Big Lots and assist in its restructuring, but the firm backed out of the agreement. Consequently, Big Lots has commenced liquidation sales across all locations.
Hope for Reversal
Big Lots President and CEO Bruce Thorn expressed optimism for an alternative deal with a different lender, which could potentially halt the liquidation process. “While we remain hopeful that we can close an alternative going-concern transaction, we’ve made the difficult decision to begin the [going-out-of-business] process to protect the value of the Big Lots estate,” Thorn stated.
Despite the liquidation, customers can still shop in-store and online for the time being.
Store Closures
Following its September bankruptcy filing, Big Lots initially planned to close 545 stores by early 2025 as part of an effort to “optimize” its footprint. By the end of 2024, 426 stores had already shut their doors. Pre-bankruptcy, the company operated 1,389 stores across 48 states.
The accelerated closures highlight the challenges faced by the retail giant as it grapples with mounting financial issues.
Employee Impact
The closures will result in significant layoffs. Thorn acknowledged the difficult decision, noting that corporate positions will be cut as early as January 2025, with other employees receiving Worker Adjustment and Retraining Notification (WARN) notices.
“I recognize this is difficult news for all of us,” Thorn wrote in an internal email obtained by The Hill. “You should be proud of the grit and resiliency you’ve demonstrated through what I know has been a challenging time.”
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A WARN notice, required by the U.S. Department of Labor, provides employees with at least 60 days’ notice before mass layoffs.
Financial Struggles
Big Lots filed for Chapter 11 bankruptcy in September, citing $3.1 billion in debt owed to multiple creditors. The company had also reported a $114.5 million net sales decline between the first fiscal quarters of 2023 and 2024.
The retail chain struggled under macroeconomic pressures, including high inflation, rising interest rates, and shifting consumer spending habits.
Broader Retail Challenges
Big Lots is not the only major retailer facing bankruptcy in 2024. Furniture retailer Conn’s HomePlus also filed for bankruptcy earlier this year, planning to close all locations. Additionally, Red Lobster filed for bankruptcy in May, resulting in the closure of around 100 restaurants.
As Big Lots navigates its next steps, employees and customers are left facing uncertainty in a challenging retail environment.
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