Another hard blow for Big Lots customers. The bargain retailer, which is now undergoing Chapter 11 bankruptcy restructuring, has declared that it will close 19 more locations in nine different states.
As the business attempts to manage its financial difficulties, this is merely the most recent in a string of closures meant to “optimize” its store footprint.
Where Do the Closures Take Place?
California, Texas, and Oregon will be the states most affected by this latest wave of closures. The breakdown is as follows:
- California: five shops
- Oregon: three shops
- Three stores in Texas
Arizona, Florida, Georgia, Idaho, Nevada, and Washington will all see more closures.
Although stakeholders have until November 23 to protest these closures, many stores may soon disappear from their local communities unless significant adjustments are made.
Why Were the Closures Made?
For a while now, Big Lots has been having financial difficulties. In order to deal with its growing debt and dwindling sales, the company announced intentions to liquidate more than 340 shops when it filed for Chapter 11 bankruptcy protection in September.
Since then, more closures have occurred, including the October 50 shop closure and the current 19-store closure.
The corporation attributed its financial difficulties primarily to “macroeconomic pressures,” such as inflation and decreased consumer expenditure. The home product categories, including furniture, seasonal products, and home goods, have been particularly severely affected, Big Lots added.
Big Lots maintains that the majority of its stores are still profitable in spite of the closures. In a statement, the company said, “We are doing everything we can to increase the profitability of all our stores,” stressing that the closures are required to maintain customer service and streamline operations.
The Future of Big Lots Under New Ownership
A big change in ownership is a part of Big Lots’ restructuring. The business is currently being acquired by private equity firm Nexus Capital Management LP. The purchase, which includes $707.5 million in funding to help the retailer stabilize, is anticipated to be completed by the end of 2024.
Big Lots is still bearing a significant debt load—roughly $3.1 billion owing to thousands of creditors—despite the restructuring’s goal of giving the company a new beginning.
Additionally, sales numbers have not been promising. Big Lots reported a drop in net sales of $114.5 million between the first quarter of 2023 and the first quarter of 2024.
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What This Signifies for Consumers?
Big Lots operated more than 1,400 locations in 48 states as of January 2023. Since then, that number has decreased to about 1,150, and it is certain that the footprint will continue to decrease with these additional closures.
Loyal customers may have to make lengthier commutes to shop in-store or turn to online options if these shops close. To keep its remaining stores and operations afloat during the bankruptcy process, Big Lots has promised to keep paying its staff and important suppliers.
