Big Lots files for bankruptcy, announces sale to investment firm
COLUMBUS, Ohio - Big Lots, the discount retailer that previously expressed "substantial doubt" about its ability to continue operating, has filed for bankruptcy.
The retailer said on Monday that it has initiated bankruptcy proceedings under Chapter 11, and that private equity firm Nexus Capital will "acquire substantially all of the Company’s assets and ongoing business operations."
"To facilitate the transaction, the Company, together with each of its subsidiaries, initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware," Big Lots said in a press release.
During the process, Big Lots will continue operating at stores and online, the company added.
Big Lots listed its assets and liabilities in the range of $1 billion to $10 billion, according to the filing, which showed creditors in the range of 5,001-10,000.
Big Lots cited troubles that began during the COVID-19 pandemic, and "macroeconomic factors such as high inflation and interest rates that are beyond its control." As a result, Big Lots says consumers are spending less on home and seasonal products, which is a "significant portion of the Company's revenue."
FILE - Big Lots shopping carts outside a store in Los Angeles, California, on Sept. 7, 2024. Photographer: Eric Thayer/Bloomberg via Getty Images
"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," Big Lots President and CEO Bruce Thorn said in a press release.
Nexus will serve as a "stalking horse bidder" in a court-supervised auction process, Big Lots said, adding that the deal will close in the fourth quarter of 2024 if Nexus is deemed the winning bidder. A stalking horse bid is used as a starting or minimally accepted offer that other interested bidders must surpass if they want to buy the asset or the company.
Earlier this summer, Big Lots told the SEC it planned to close 35 to 40 stores, which quickly grew to hundreds.
Additional store closures are expected "as part of the court-supervised sale process."
The retailer operates around 1,400 stores across the U.S. and employs more than 30,000 workers.