Big Lots, the discount retailer crumbling under bankruptcy pressures, is experiencing unexpected developments as it reaches new agreements to keep hundreds of its stores open. Originally, the company announced it would close all remaining locations, numbering around 870, and begin going-out-of-business sales. This announcement came after multiple unsuccessful attempts to turn the business around following its Chapter 11 filing earlier this year.
Filed in September, the bankruptcy was accompanied by hopes of selling the company to private equity, which eventually fell through. Just last month, Big Lots stated it would have to close its stores, though left room for alternative arrangements. This week brought some unexpected relief: Big Lots confirmed its deal with Gordon Brothers Retail Partners to transfer assets to other retailers, with Variety Wholesalers stepping up to operate between 200 and 400 of the locations under the Big Lots brand.
The struggle for survival took on new dimensions with the agreement, which may also preserve thousands of jobs. Current Big Lots employees at the affected stores could be offered positions with Variety Wholesalers, which operates over 400 discount chains throughout the Southeastern and Mid-Atlantic regions. Lisa Seigies, president and CEO of Variety Wholesalers, expressed optimism, stating, “We are excited to partner with Gordon Brothers to provide a path forward for the Big Lots brand and hundreds of its stores.”
Details about the specific locations slated for continued operation remain scant; the companies have not disclosed which stores will remain open or targeted regions. A spokesperson for Big Lots mentioned, “We are not sharing additional information beyond the press release at this time.”
Traditionally, Big Lots has offered liquidation-style pricing on closeouts and deep discounts, but recent strategic shifts toward higher-priced products have stunted customer engagement and diminished sales. Big Lots previously operated over 1,300 stores before situational pressures narrowed their scope.
Following the bankruptcy proceedings, the company announced plans to close over 340 stores, with several already shutting their doors, including locations in Binghamton and Vestal, New York. Employees at the Vestal store received notice of their impending job loss, marking yet another chapter of turmoil for the chain.
On the potential sale to Gordon Brothers, Bruce Thorn, Big Lots’ president and CEO, described the agreement as significant, stating, “This sale agreement and transfer present the strongest opportunity to preserve jobs, maximize value for the estate and maintain the Big Lots brand.” The transfer is contingent upon bankruptcy court approval and customary closing conditions, representative of the lengthy bankruptcy management process.
Meanwhile, Big Lots has initiated going-out-of-business sales this season, discounting their full inventory by up to 25%, showcasing the urgency felt by the near-closing stores. The promotional campaigns highlight the need to liquidate stock and safeguard revenue as the end of the Big Lots era loomed.
With the new deal underway, customers and workers alike are kept on their toes, the fate of the Big Lots brand hangs precariously as it tries to navigate this chaotic retail environment. Rival discount retailers like Party City recently filed for bankruptcy, showcasing the significant challenges facing businesses reliant on retail foot traffic.
While the deal could save hundreds of stores and the jobs of their current employees, many other locations across the country are marked for closure, spotlighting the dichotomy between survival and obsolescence within the retail sector. Analysts suggest this ordeal might reflect broader trends within the discount retail domain where changing consumer preferences and increased competition create formidable hurdles.
Overall, Big Lots stands at a crossroads, battling to adapt to the shifting marketplace dynamics and customer expectations. Their next steps will be instrumental not only for the company’s survival but also for the potential reopening of stores previously marked for closure.
The coming days will reveal the results of their restructuring efforts and whether this could mark the beginning of resurgence or continued decline for the Big Lots brand.