Big Lots files for bankruptcy, may close additional stores

(Gray News) - Financial woes have hit another big discount retailer.

Big Lots announced that it is filing for Chapter 11 bankruptcy on Monday.

The retailer blamed several economic factors for the move, including high inflation and interest rates, that caused its core customers to cut discretionary spending “on the home and seasonal product categories that represent a significant portion” of its revenue.

As part of the filing, private equity firm Nexus Capital Management will take over nearly all Big Lots’ stores and business operations.

Nexus Capital will serve as a “stalking horse” bidder in a court-supervised auction, with the proposed sale subject to higher offers or other bids that could be considered better, the Associated Press reported. If Nexus winds up as the winning bidder, the deal is anticipated to close in the fourth quarter.

The 57-year-old company has secured more than $700 million in fresh financing to keep operating and to pay employees and vendors.

Big Lots is in the process of closing roughly 300 of its 1,400 stores across the United States, and the company said more store closures could be coming.

“Though the majority of our store locations are profitable, we intend to move forward with a more focused footprint to ensure that we operate efficiently and are best positioned to serve our customers,” said Big Lots CEO Bruce Thorn. “To accomplish this, we intend to use the tools afforded by this process to continue optimizing our store fleet in an orderly manner.”

Big Lots joins a growing list of well-known retailers hitting financial turbulence as customers cut back spending on non-essential items.

The retailer said that during and after the bankruptcy and sale process, they will continue to serve customers at their nearest store location or online at biglots.com.