Big Lots files for bankruptcy, operates 1,400 stores

For the first half of 2024, 21 stores have filed for bankruptcy, Standard & Poors said in a July report. LL Flooring just announced that it is closing all of its 442 stores and Red Lobster – perhaps the best-known seafood chain in America – has filed for bankruptcy but only after shutting down 100 restaurants. About a dozen other restaurant chains are in the same financial straights.

Other stores like Nordstrom are closing locations in high-crime areas like San Francisco, where shoplifting has become the untenable cost of doing business due to lax laws restraining it.

Big Lots hopes to unload its losses on private equity firm Nexus Capital but has to demonstrate some financial viability by closing stores and cutting debt. The retailer has borrowed $707.5 million to stay afloat while it has already declared that it will shutter 300 of its 1,400 stores, the Mail noted.

Retail analyst Neil Saunders there was no place else for Big Lots to go but the bankruptcy court after sales continued to drop for 16 consecutive quarters. Saunders, head of retail at GlobalData, told the Mail that there is a simple reason for Big Lots losing money: that it is no longer providing merchandise at a discount price, which “undermines the retailer's key point of differentiation.”

Big Lots did not release its usual financial status on Friday, suggesting the news was not good and confirming suspicions among market analysts that the company was failing and would declare bankruptcy.

In addition to no longer discounting prices, Big Lots is losing its customer loyalty because the merchandise it sells can be found cheaper at big department stores like Walmart. It might have weathered the storm, Saunders told the Mail, if it had the financial capital to recover.

“Sadly, this is not the case,” Saunders said. “As of the latest quarter filed, the company had $573 million of long-term debt and growing interest payments. Bankruptcy will allow Big Lots to try and put itself on a more stable footing. This includes restructuring debt and closing poorly performing stores.”

CEO Bruce Thorn has mused about his company’s difficult future by saying Americans are just not committed to buying expensive additions for their homes right now. Big Lots lost $132 million alone in the first three months of 2024, the Mail noted