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Nearly three months after it cited “significant doubts about the company's ability to continue operations” in a filing with the U.S. Securities and Exchange Commission, Big Lots said Monday it had secured $707.5 million to support operations and sell the business to private equity firm Nexus Capital.
The announcement comes as the company filed for Chapter 11 bankruptcy protection. According to documents filed in Delaware bankruptcy court, Big Lots' assets and liabilities are listed in the range of $1 billion to $10 billion, with between 5,001 and 10,000 creditors.
Big Lots cited problems that began during the COVID-19 pandemic and “macroeconomic factors such as uncontrollable high inflation and interest rates.”
As a result, Big Lots said consumers are spending less on home and seasonal items, which make up a “significant portion of our revenue.”
Declining sales have led large companies to consider filing for bankruptcy
A close-up of a Big Lots store on Saturday, September 7, 2024 in Los Angeles, California, USA. (Eric Thayer/Bloomberg via Getty Images/Getty Images)
“At Big Lots, we take pride in the work we do every day to provide undeniable value and exceptional savings to our customers, as well as the work we do to build stronger communities through philanthropy,” Big Lots president and CEO Bruce Thorne said in a press release.
“The steps we are taking today will enable us to move forward with new owners who believe in our business and provide us with financial stability, while optimizing our operations, accelerating our performance improvement and delivering on our promise to become a highly valued leader.”
Big Lots closes dozens of stores, putting survival in jeopardy
CARL PLACE, NY: A Big Lots store in Carle Place, New York on July 23, 2024. (Howard Schnapp/Newsday RM via Getty Images/Getty Images)
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| big | Big Lots Co., Ltd. | 0.50 | +0.04 |
+8.66% |
Big Lots told the SEC earlier this summer it planned to close 35 to 40 stores, a number that quickly grew to hundreds, with more closures expected “as part of the court-supervised sale process.”
The retailer operates approximately 1,400 stores across the United States and employs more than 30,000 people.
Big Lots said Nexus would act as the “stalking horse bidder” in the court-supervised auction process, adding that if Nexus is deemed the successful bidder, the transaction would close in the fourth quarter of 2024. A stalking horse bid is used as an opening or minimum acceptable bid that must be surpassed by other interested bidders wanting to purchase the assets or company.
A customer shops at a Big Lots store on June 7, 2024, in Hercules, California. (Justin Sullivan/Getty Images/Getty Images)
Big Lots said its second-quarter results were in line with guidance. The company is scheduled to report second-quarter results on Sept. 12 after delaying them from Sept. 6.
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“We are thrilled to have the opportunity to partner with Big Lots and restore this iconic brand to its position as America's leading great value retailer. We believe the Big Lots business has incredible potential and its best days are ahead,” Evan Gluckoft, managing director at Nexus, said in a statement.
Reuters contributed to this report.
