Discount home goods retailer\u00a0Big Lots\u00a0filed for bankruptcy protection on Monday after high interest rates and a\u00a0sluggish housing market\u00a0slowed demand for its low-priced furniture and decor.\u00a0<\/p>\n
As part of its Chapter 11 filing, Big Lots agreed to sell its business to private equity firm Nexus Capital Management for about $760 million, consisting of $2.5 million in cash plus its remaining debt and liabilities, court records show.\u00a0<\/p>\n
The company, which runs more than 1,300 stores across 48 states, is one of the country\u2019s largest closeout retailers and specializes in offering bargain-basement pricing on all things home. It brought in about $4.7 billion in revenue in fiscal 2023, but sales have consistently fallen after pandemic-era demand for home furnishings dropped.<\/p>\n
In a press release and court filings, Big Lots said it will operate its business normally but has started the process of closing nearly 300 stores so it can fix its balance sheet and reduce costs.<\/p>\n
\u201cThe 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,\u201d CEO Bruce Thorn said in a news release. \u201cAs we move through this process, we remain committed to offering extreme bargains, enabling easy shopping in our stores and online, and providing an outstanding customer experience.\u201d\u00a0<\/p>\n
Evan Glucoft, managing director at Nexus, said the firm is \u201cconfident\u201d that Big Lots\u2019 \u201cgreatest days are ahead.\u201d\u00a0<\/p>\n
\u201cWe are excited to have the opportunity to partner with Big Lots and help return this iconic brand to its status as America\u2019s leading extreme value retailer,\u201d said Glucoft.\u00a0<\/p>\n
Big Lots has been teetering near the edge for months after high interest rates and a sluggish housing market\u00a0slowed consumer demand\u00a0for new furniture, decor and other home supplies. While discount retailers tend to do well in rough economic cycles, Big Lots primarily caters to lower- and middle-income consumers, who have curbed discretionary spending at a higher rate than their more affluent counterparts.\u00a0<\/p>\n
\u201cThe company has been adversely affected by recent macroeconomic factors such as high inflation and interest rates that are beyond its control,\u201d Big Lots said in a news release. \u201cThe prevailing economic trends have been particularly challenging to Big Lots, as its core customers curbed their discretionary spending on the home and seasonal product categories that represent a significant portion of the company\u2019s revenue.\u201d\u00a0<\/p>\n
Beyond macroeconomic conditions, Big Lots also operates in a highly competitive space and has struggled to differentiate itself from other discounters that offer home goods or specialize in the category, such as\u00a0Wayfair,\u00a0Walmart\u00a0and\u00a0TJX Cos.\u2032 Home Goods.<\/p>\n
\u201cBig Lots is not always good value for money. Many of the items it sells are not high end and are not drastically expensive, but equivalents can often be found much cheaper at other stores, including Walmart,\u201d Neil Saunders, managing director of GlobalData, said in a note.<\/p>\n
\u201cThe other issue [is] the assortment is very jumbled and muddled, which is partly a function of the way the business operates,\u201d Saunders added. \u201cHowever, there is far too much choice and not nearly enough treasure for consumers to be enticed by. This creates an unsatisfactory shopping experience, especially compared to other players operating in the discount space, such as off-price retailers.\u201d<\/p>\n
As part of the bankruptcy process, Big Lots will hold a court-supervised auction for its business. It could go to a different buyer if they make a bid that\u2019s higher than Nexus\u2019 offer.\u00a0<\/p>\n
It\u2019s working with law firm Davis Polk & Wardwell, investment bank Guggenheim Securities and advisory firm AlixPartners. A&G Real Estate Partners has been tapped as Big Lots\u2019 real estate advisor, while Nexus will be represented by law firm Kirkland & Ellis.<\/p>\n<\/p>\n
Discount home goods retailer\u00a0Big Lots\u00a0filed for bankruptcy protection on Monday after high interest rates and a\u00a0sluggish housing market\u00a0slowed demand for its low-priced furniture and decor.\u00a0 As part of its Chapter 11 filing, Big Lots agreed to sell its business to private equity firm Nexus Capital Management for about $760 million, consisting of $2.5 million in […]<\/p>\n","protected":false},"author":0,"featured_media":9298,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-9297","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/9297","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=9297"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/9297\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/9298"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=9297"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=9297"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=9297"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}