OAN Staff James Meyers
10:12 AM – Tuesday, September 10, 2024
Big Lots representatives stated on Monday that it has officially filed for Chapter 11 bankruptcy for protection from its massive debts, with the retailer citing “inflation and high interest rates” as reasons for filing.
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The Ohio-based company said on Monday that it has secured $707.5 million to support its operations and sell its business to private equity firm Nexus Capital.
Meanwhile, Big Lots listed its assets and liabilities in the range of $1 billion to $10 billion, according to a filing with bankruptcy court in Delaware, which showed creditors in the range of 5,001-10,000.
The company has also cited difficulties that began at the beginning of the COVID-19 pandemic, “macroeconomic factors such as high inflation and interest rates that are beyond its control.”
Big Lots claims that consumers are spending less on home and seasonal products, which is a “significant portion of the Company’s revenue.”
“We are proud of the work we do every day across Big Lots to provide our customers with unmistakable value and exceptional savings, as well as building stronger communities through our philanthropic efforts,” Big Lots President and CEO Bruce Thorn said in a press release.
“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.”
Bankruptcy was “only a matter of time for the company,” which has posted 16 consecutive quarters of comparable sales declines, according to Neil Saunders, the managing director of GlobalData.
“Big Lots is not always good value for money. Many of the items it sells are not high end are not drastically expensive, but equivalents can often be found much cheaper at other stores, including Walmart,” the analyst noted.
Currently, the retailer operates close to 1,400 stores across the U.S. and employs over 30,000 workers.
Nexus will serve as a “stalking horse bidder” in a court-supervised auction process, according to Big Lots, and the deal will be completed in the fourth quarter of 2024 if Nexus is deemed the winning bidder.
Additionally, the chain has received a delisting notice from the New York Stock Exchange because the average closing price of its shares was below $1 for a consecutive 30 trading-day period.
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