After closing stores for most of 2024 and trying to shore up the company’s sales to keep its doors open in recent months, discount retailer Big Lots has now announced plans to close all stores and go out of business. Here’s what you need to know about Big Lot closing.
What happened?
On Thursday, Big Lots said it now plans to go out of business and close all of its remaining stores (unless there’s a hail Mary game — more on that below). Big Lots said it decided to begin liquidation sales after a deal with Nexus Capital Management fell through.
Big Lots was working on a deal with investment firm Nexus Capital Management that would see it sell itself. Big Lots faced serious financial difficulties in 2024 as inflationary pressures weighed on profits and caused customers to cut back on discretionary spending, Big Lots’ bread and butter.
Things got so bad for the company that it started closing stores over the summer. In September, the company filed for Chapter 11 bankruptcy protection to get its finances under control.
In recent months, Big Lots had been working on an asset purchase deal with Nexus Capital Management, but that potential deal has now fallen through.
Big Lots did not disclose why it was unable to complete the sale to Nexus Capital Management in its statement announcing the liquidated sales, but Bloomberg reports that valuations of Big Lot’s inventory fell short of expectations, making it economically unviable for Nexus Capital Management to proceed with the sale.
Any hope for big lots?
Yes, but it’s subtle. Big Lots CEO Bruce Thorn said in announcing the going-out-of-business (GOB) sales, “We hope to be able to close an alternative transaction to preserve the value of the Big Lots property.” , we made the difficult decision to begin the GOB process.
“Alternative going concern transaction” means a sale to another party. Some Big Lots stores may be saved if the sale can still be completed. As for who Big Lots will sell itself to, the company’s statement said it could be “with Nexus or another party.” Big Lots said it hopes to close such a deal “in early January.”
But Big Lots isn’t waiting until then to start closing stores.
When will the layoff sales take place?
Probably soon. According to Big Lots, every remaining location will go on sale “in the coming days to preserve the value of the property.” The company has about 870 places left.
What about Big Lots employees?
Big Lots did not address the impact of the store closings on its employees. Bloomberg the number of employees of the company is about 27,000 people. Unfortunately, most of these employees will lose their jobs after the exit sales are completed.
Big Lots stock price collapsed in 2024
Not surprisingly, with all of Big Lots’ financial woes, the stock has crashed this year. The stock previously traded under the ticker “BIG” on the New York Stock Exchange, but with the price drop, it now trades under the ticker “BIGGQ” on the OTC exchange OTCPK.
As of yesterday’s market close, BIGGQ stock was trading at 8 cents per share, down nearly 99% for the year.
Big Lots was founded in 1967 by Consolidated International, Inc. in Columbus, Ohio. was founded under the name and changed its name to the current one in 2001. The company celebrated its 57th anniversary this year.