Struggling discount retailer Big Lots has secured a last-minute rescue deal to save hundreds of stores and thousands of jobs just weeks after filing for bankruptcy. The agreement, announced on December 27, 2024, allows the company to transfer its assets, including stores and distribution centers, to Gordon Brothers Retail Partners LLC and Variety Wholesalers.
Under this transaction, Variety Wholesalers, which currently operates over 400 discount retail locations primarily under brands such as Roses, Maxway, and Bill’s Dollar Stores, is set to acquire between 200 and 400 Big Lots stores. The acquired stores will continue to operate under the Big Lots brand, providing hope to employees and customers alike.
Big Lots entered Chapter 11 bankruptcy proceedings back in September 2024 following significant sales declines and challenges within the retail environment. The company reported more than 27,000 employees at the time of its filing, with over 1,300 locations across the U.S. When the company stated plans to close down all its stores, it sparked concerns about job losses amid declining consumer spending.
The recent deal emerged after previous negotiations to sell the company to Nexus Capital Management collapsed due to disappointing inventory appraisals. This unfavorable valuation made the sale untenable, leading Big Lots to prepare for liquidation as it announced going-out-of-business sales at approximately 870 locations.
Bruce Thorn, the President and CEO of Big Lots, emphasized the significance of the deal, stating, "The strategic sale to Gordon Brothers and the transfer to Variety Wholesalers is a favorable and significant achievement for Big Lots... This sale agreement and transfer present the strongest opportunity to preserve jobs, maximize value for the estate and assure continuity of the Big Lots brand.” His sentiment echoed the urgent need to save the brand and protect jobs during these turbulent times.
While the transaction is seen as beneficial, it also leaves uncertainty for many employees; the fate of thousands remains unclear. Variety Wholesalers has indicated it may retain Big Lots associates at the acquired locations and distribution centers, but no guarantees have been made. This aspect creates additional anxiety among staff members who have weathered the recent downturn and might be apprehensive about the transition.
Losing some of its locations has already taken a toll on Big Lots, which closed at least 315 stores across the country as part of its restructuring efforts. The company had suffered multiple quarters of declining sales, leading to this drastic restructuring. The latest transaction, pending approval from the bankruptcy court, reflects extensive teamwork and effort from all parties involved to keep the Big Lots identity alive.
Rick Edwards, the Head of North America Retail at Gordon Brothers, expressed optimism about Big Lots' ability to maintain its customer base through the acquisition. He said, "We are pleased to reach this strategic agreement with Big Lots and partner with Variety Wholesalers..." His comments highlight the operational continuity planned for Big Lots and the aim to provide customers with continued access to bargains.
Lisa Seigies, President and CEO of Variety Wholesalers, also conveyed enthusiasm about the acquisition, stating, "We are excited to partner with Gordon Brothers to provide a path forward for the Big Lots brand and hundreds of its stores. We look forward to working with members of the Big Lots team to realize the exciting opportunities ahead." Such comments might help alleviate some concern among employees and customers by assuring them of organizational stability.
The decision to move forward with this new partnership is viewed as pivotal for the future of Big Lots, especially after it faced the threat of complete liquidation just weeks ago. This plan reflects the retail evolution, as companies seek innovative models to adapt to changing market conditions and consumer preferences.
Should the agreement finalize as planned, Big Lots will continue to serve its loyal customer base with the same branding and possibly some of the same personnel behind the counters. While uncertainty still clouds the future of many employees, those who remain might find solace knowing their employer is not fading away but rather transitioning under new management with the intent to maintain operational standards and service quality.
Overall, this development serves as both a hopeful update amid stark retail challenges and as testimony to the hard work of countless individuals advocating for the survival of the Big Lots brand. With the backing of Gordon Brothers and Variety Wholesalers, Big Lots may just have the support it needs to navigate through these testing times successfully.
