The store closures are part of a larger trend of prominent American businesses permanently closing their doors due to financial hardships.
Big Lots, the discount retail giant, has shuttered hundreds of locations since filing for Chapter 11 bankruptcy earlier this month. The company intends to close a third of its 1,392 stores around the country, 392 of which have already been permanently closed. The store closures are part of a larger trend of prominent American businesses permanently closing their doors due to financial hardships.
Big Lots had already indicated that 344 stores were set to close but announced the closures of 48 more in its latest filing on Sept. 20. This includes 11 stores in Texas, six in California, four in Pennsylvania, and three in Florida. Other locations are closing in Washington state, New York, and Indiana. The goal is to shut down 550 locations in order to demonstrate financial viability to secure funding, as reported by the Daily Mail. The mass store closures would eliminate debt, which would entice potential financial investors.
The Ohio-based retail chain intends to transfer its losses to private equity firm Nexus Capital; however, it must first establish financial stability by closing stores and reducing debt. Big Lots has already borrowed $707.5 million to stay afloat. According to retail experts, Big Lots' primary issue is that it advertises itself as a source of bargains, yet its prices are frequently higher than those of competitors such as Target and Walmart.
Neil Saunders, a retail analyst and head of retail at GlobalData, stated that bankruptcy was "the inevitable destination" for a chain that had experienced sales decline for 16 consecutive quarters. He identified a significant factor, as noted by the Mail, that had led customers to abandon Big Lots: its poor value, which "undermines the retailer's key point of differentiation."
Nexus plans to buy Big Lots if the company gets no other bidders.
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