Big Lots is closing stores in 2024, joins growing list of retailers at risk of bankruptcy
Big Lots is closing stores in 2024, joins growing list of retailers at risk of bankruptcy
The Ohio-based retail chain said in an SEC filing that it may not be able to continue as a company in the wake of substantial losses and debt.
Discount retail chain Big Lots is planning to close at least 35 stores this year amid falling sales and speculations that it may declare bankruptcy.
The Ohio-based retailer, which has locations in 48 states, reported in a filing to the Securities and Exchange Commission (SEC) that it expected to close 35-40 stores this year while opening three new locations.
The planned closures come as the total number of stores owned by the retailer has trended down in recent months, from 1,427 locations during the first quarter of last year to 1,392 outposts as of the same period this year.
Why is Big Lots struggling?
Like many other retailers, Big Lots has been struggling with a drop in sales due to inflation, higher prices, and consumers cutting back on spending. Last month, the retailer reported that it lost $205 million for the first quarter of this year, according to an earnings release.
“While we made substantial progress on improving our business operations in Q1, we missed our sales goals due largely to a continued pullback in consumer spending by our core customers, particularly in high ticket discretionary items,” Bruce Thorn, CEO and president of Big Lots, said at the time.
Big Lots expected that its sales would continue to drop during the second quarter of this year relative to the same period last year, according to the SEC filing.
“In 2024, the U.S. economy has continued to face macroeconomic challenges including elevated inflation, which has adversely impacted the buying power of our customers,” the filing stated.
Amid the drop in sales, the retailer reported that it fell an additional $72.2 million into debt between the first quarters of 2023 to 2024, bringing its total debt to $573.8 million at the end of this year’s first quarter.
Which Big Lots locations are closing?
The SEC document did not reveal the locations of the stores that would be closing. Big Lots did not immediately respond to requests for comment from Fast Company.
Last month, Thorn said Big Lots “exceeded (its) targets” in its campaign to reduce costs, offer more “new and exciting extreme bargains,” and enhance productivity during the first quarter of this year—all goals it needed to continue to meet to drive more traffic to stores.
Despite this, the retailer expressed “substantial doubt” in its ability to go on as a company in the SEC filing, driving speculations and concerns that the retailer may file for bankruptcy.
(10)
