Big Lots, which filed for bankruptcy protection in September, has secured an agreement to keep hundreds of its stores and distribution centers operational.
Big Lots revealed it will be sold to Gordon Brothers Retail Partners, a firm known for working with distressed companies. Gordon Brothers intends to transfer Big Lots' stores, distribution centers, and other assets to various retailers.
Variety Wholesalers Inc., which owns more than 400 discount stores in the U.S. Southeast and Mid-Atlantic, plans to acquire between 200 and 400 Big Lots locations and operate them under the Big Lots brand. The company will also take over up to two of Big Lots' distribution centers.
Big Lots, based in Columbus, Ohio, is known for selling furniture, home decor, and a variety of other products. When the company filed for bankruptcy in September, it attributed its financial struggles to inflation and rising interest rates, which led to a decline in consumer spending. As a result, customers pulled back on purchasing home goods and seasonal items—two key product categories that account for a significant portion of Big Lots' revenue. These economic pressures have made it harder for the chain to maintain its sales and profitability, prompting the need for restructuring and strategic changes.
At the time of its bankruptcy filing, Big Lots planned to sell its assets and ongoing business operations to private equity firm Nexus Capital Management. This move was part of the company's strategy to restructure and address its financial challenges.
However, on December 20, Big Lots announced that the deal with Nexus Capital Management had fallen through. As a result, the company partnered with Gordon Brothers to conduct going-out-of-business sales at its 869 U.S. locations.
Big Lots Inc. has secured $707.5 million in financing, including $35 million in new funding from some of its existing lenders. Once approved by the court, this financing, combined with cash from its ongoing operations, is expected to provide enough liquidity to support the company as it works to complete the sale. Additionally, the chain has received a notice from the New York Stock Exchange, as the average closing price of its shares has fallen below $1 for a consecutive 30-day trading period.
