Connect with us

Big Lots Is the Latest Retail Company To Begin Bankruptcy Proceedings

The exterior of a Big Lots store front with large white font and the word "bankruptcy" in large letters behind the building
Source: Brendon Bell/Getty Images; MCCAIG/Getty Images

The U.S. discount home goods retailer Big Lots has announced major changes to its corporate structure amid a full bankruptcy claim.

The company has said that it secured $707.5 million to support its ongoing operations and sell its business to a private equity firm called Nexus Capital.

Chapter 11 Bankruptcy

Source: @WAVY_News/X

The company will be filing bankruptcy proceedings under Chapter 11.

Chapter 11 bankruptcy is used by companies that need to completely restructure their business while still paying back debtors at a reduced rate.

Assets and Liabilities

Source: @thecoopertom/X

Big Lots was forced to publicly list its assets and liabilities to support the bankruptcy claim.

The company notes that the assets and liabilities sit in the range of $1 billion to $10 billion, and between 5,000 and 10,000 creditors they currently cannot pay off.

Nexus Capital

Source: Vlada Karpovich/Pexels

The company buying out Big Lots is Nexus Capital Management LP.

The company says that ir provides debt advisory services and traditional commercial broker solutions to retail, industrial, and childcare industries.

Nexus Saving the Brand

Source: Freepik

Nexus will act as a “stalking horse bidder” in the court-supervised action process.

The deal will close in the fourth quarter of 2024 if Nexus is the final bidding winner. A stalking horse bid is a starting or minimally accepted offer that other interested bidders must surpass if they want to buy the asset or the whole company.

Big Lots

Source: @Houstonomics/X

Big Lots is a retailer with roughly 1,400 stores around the U.S. and a large online commerce platform.

The company employs more than 30,000 workers and has been grappling with declining sales over the past few quarters.

Other Furniture Stores Are in Trouble

Source: @FIRMANPower/X

Last month, Badock Home Furniture & More was forced to close 380 US stores due to failing revenues and a lack of in-person sales.

The parent company, Conn’s went bankrupt in order to raise more liquid cash for the company and keep a select number of Conn’s Home Plus locations open.

Retail Is In a Slump

Source: Albero Furniture Bratislava/Unsplash

Part of the issues that many home furnishing stores are facing is the tight competition with ultra-cheap and more convenient online retailers like Amazon and Ikea.

Since the boom in online shopping, traditional retailers have struggled to keep up with the changes.

Other US Retailers Are Failing

Facade with sign at Amazon Books retail store on Santana Row in the Silicon Valley, San Jose, California, December 14, 2019. (Photo by Smith Collection/Gado/Getty Images)

In-person furniture stores aren’t the only sector that has been failing to keep up lately.

In the past year, retail sales have fallen substantially in the US. With the current economic market, people just aren’t spending the same on luxury items as they used to.

Big Lots Issues a Press Release

Source: @ABC7NY/X

Big Lots CEO Bruce Thorn said, “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.”

During the process, its locations and websites will remain open for shopping until the company can make a final decision about the fate of the store.

Several Economic Factors To Blame

Source: Freepik

Big Lots blamed a number of economic factors for the bankruptcy proceedings.

The company cites issues with high inflation and interest rates as a reason why customers have been changing their spending habits. Big Lots says that customers seek value – not necessarily low costs for their money.

More Store Closures Could Be Coming

Source: @TurboLeaks/X

“The prevailing economic trends have been particularly challenging to Big Lots, as its core customers curbed their discretionary spending on the home and seasonal product categories that represent a significant portion of the company’s revenue,” it explained.

Roughly 300 of its 1,400 locations will be closed across the United States. On Monday, more store closures are expected to be announced, but the company will “need to close certain locations to ensure that our business operates efficiently and we can continue serving our customers.”

Advertisement
Advertisement

You May Also Like

The Most Dangerous Tree in the World Grows in the United States – It’s 12,000x More Lethal Than a Rattlesnake

Thousands Of People Live Downstream From Dams- Most Do Not Realize The Potential Risks

Kroger CEO Defends High Prices, Claims It’s not The Company’s Fault

New Study: West Coast Faces an Imminent Catastrophic Earthquake – ‘The Big One’

Culture War in America Is Destroying the Media Industry

Creator of Ozempic Defends the High Price Point, Saying It’s Reducing the Cost of Obesity

World’s Largest Man-Made River Faces Challenges in $25 Billion Initiative

DeSantis Approved Religious Guidance in Florida Schools- Satanic Temple Vows to ‘Raise Hell’