Bankrupt retailer Big Lots (NYSE: BIG) has reached an agreement to sell the company to an affiliate Nexus Capital Management.
The company says Nexus has agreed to acquire substantially all of the company's assets and ongoing business operations and will continue to operate during Chapter 11 bankruptcy proceedings.
Bruce Thorn, President and Chief Executive Officer, said, "The 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," said Bruce Thorn, President and CEO.
Big Lots has struggled since the pandemic. It blames high inflation and interest rates for hits to its long-term performance and profitability.
The company says its core customers have curbed spending on the home and seasonal products that make up a large portion of the company's profits.
As part of the sale the company says additional store locations will close.
"We intend to move forward with a more focused footprint to ensure that we operate efficiently and are best positioned to serve our customers. To accomplish this, we intend to use the tools afforded by this process to continue optimizing our store fleet in an orderly manner," Thorn said.
Big Lots said Monday that it has secured commitments for $707.5 million of financing, including $35 million in new financing from some of its current lenders.
It hopes to return to profitability in 2025.
Evan Glucoft, Managing Director of Nexus, said, "We are excited to have the opportunity to partner with Big Lots and help return this iconic brand to its status as America's leading extreme value retailer. The Big Lots business has incredible potential and we are confident that its greatest days are ahead."
The sale is not a done-deal. It is subject to better offers, court approval and other conditions.
Big Lots said in a statement Monday that it is in danger of being unlisted by the New York Stock Exchange because its stock price has dropped under $1 for a consecutive 30 trading-day period.
