The post-Covid-19 retail environment has not been kind to the home goods sector, as several retailers have been forced to file for bankruptcy protection, with some needing to liquidate and close down operations.
Home goods retailers Bed Bath & Beyond and Tuesday Morning were two such brick-and-mortar retail chains to disappear as they both filed for Chapter 11 bankruptcy in 2023, liquidated and shuttered all stores. Both now have an e-commerce presence, with Bed Bath & Beyond launching a retail partnership with Kirkland.
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Discount retailer 99 Cents Only was another popular chain that filed for Chapter 11 bankruptcy on April 8, 2024, liquidated and closed down all 371 locations in Arizona, California, Nevada, and Texas.
Related: Another major trucking company files for Chapter 11 bankruptcy
Home goods chain The Container Store joined the list of retailers in dire straits as Beyond (BYON), which owns online retailers Overstock, Bed Bath & Beyond, Baby & Beyond, and Zulily, on Nov. 20 said that it had concerns about a proposed $40 million investment in the retail chain after the home goods retailer had not been able to secure additional financing acceptable to Beyond.
The Midvale, Utah-based online retail owner on Oct. 15, 2024, reached a $40 million securities purchase agreement with The Container Store Group Inc. that required the home goods retailer to secure new financing on terms commercially acceptable to Beyond as a condition to closing.
Under the agreement, Beyond has the right to determine in its sole discretion the adequacy of The Container Store's financing arrangements.
Beyond's skepticism has prompted people with knowledge of The Container Store's business plans to assert that the retailer is planning to file for bankruptcy if Beyond pulls out of the deal.
Big Lots to liquidate all remaining stores
Finally, bankrupt discount home goods chain Big Lots will begin going-out-of-business sales at all remaining store locations in the coming days after a proposed sale agreement with stalking-horse bidder Nexus Capital Management collapsed, the company said in a Dec. 19 statement.
Related: Disasters force key energy company to file Chapter 11 bankruptcy
The company asserted that it does not anticipate completing a previously announced asset purchase agreement with Nexus but will continue seeking an alternative going concern transaction with Nexus or another party.
More bankruptcy stories:
- Another popular pizza chain files for Chapter 11 bankruptcy
- Popular vodka brand files for Chapter 11 bankruptcy
- Auto parts retailer dumps hundreds of stores, no bankruptcy yet
Big Lots aims to complete a Section 363 bankruptcy sale by early January, the statement said. The company believes the liquidation sales do not preclude it from completing a going concern transaction.
Retail chain still seeks going concern sale
"We all have worked extremely hard and have taken every step to complete a going concern sale. While we remain hopeful that we can close an alternative going concern transaction, in order to protect the value of the Big Lots estate, we have made the difficult decision to begin the GOB process," CEO Bruce Thorn said in the statement.
In the meantime, the company said it will continue serving customers in-store and online.
Big Lots filed for Chapter 11 protection on Sept. 9 in the U.S. Bankruptcy Court for the District of Delaware seeking to sell its assets to stalking-horse bidder Nexus Capital Management for a $760 million bid, which included $2.5 million in cash, debt payoff, and assumption of liabilities.
The debtor designated 553 of its 1,392 store locations in 48 states for closure in September and October court filings. Despite reaching a preliminary agreement for the sale of the company's assets, the deal has not gone forward and the parties continue negotiations.
The Columbus, Ohio, debtor blamed high competition, Covid-19 disruption, a high interest rate environment, and a less dependable supply chain, which increased operating costs, as reasons it filed for bankruptcy, according to court papers.
The retail chain struggled in recent quarters, as a downturn in the economy had soured customers and hurt profits, according to Thorn. The company had a 10.2% drop in sales to $1.01 billion during the first quarter and a loss of $132.3 million.
Big Lots was the nation's fourth largest home goods retailer with general operating revenues of $4.7 billion in 2023.
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