Big Lots, the discount retailer headquartered in Columbus, Ohio, announced it will shut down all its remaining stores after filing for Chapter 11 bankruptcy.
This decision comes as the company's attempt to sell its operations to Management fell through, leaving the fate of over 27,000 employees uncertain.
Big Lots to Begin Storewide Liquidation as Bankruptcy Forces Closure of All Locations
In a press release on Thursday, Big Lots confirmed that going-out-of-business sales at all its locations would begin in the coming days.
According to NewsChannel19, the retailer, known for its budget-friendly home goods and furnishings, had already closed over 400 stores this year, amounting to nearly half of its 900-store footprint.
Big Lots initially filed for bankruptcy in September, citing challenges from inflation and stiff competition in the retail sector. Following the filing, the company announced plans to sell its business and assets to Nexus Capital Management, with court approval granted in November.
However, the sale fell apart in December due to a lower-than-expected valuation of the company's inventory and unresolved disputes with landlords over unpaid rent.
Bruce Thorn, Big Lots' president and CEO, informed employees via email about the closures, expressing hope that a sale could still reverse the decision.
Thorn acknowledged the difficulty of the situation and commended employees for their resilience during this challenging time. However, he also confirmed workforce reductions for corporate employees would begin in January, with some staff receiving formal notices under the WARN Act.
Court Hearing Looms Over Big Lots as Liquidation Appears Inevitable
Despite the bankruptcy proceedings, Big Lots initially planned to continue serving customers in-store and online while exploring alternative deals with Nexus or another potential buyer.
However, the failure to finalize a sale leaves the company on the brink of liquidation.
Big Lots' financial troubles mirror those of other struggling retailers, such as Party City and Container Store Group, both of which are reportedly preparing for bankruptcy, EastBayTimes said.
Analysts attribute these challenges to inflation and a slowdown in consumer spending on home goods, which have significantly impacted budget-conscious shoppers.
The company's downfall highlights the difficult landscape for brick-and-mortar retailers as they face economic pressures and evolving consumer habits. A court hearing scheduled for this week will address disputes with creditors, including a demand for unpaid rent or court-appointed liquidation.
As Big Lots prepares to close its doors for good, it marks the end of an era for the discount chain, leaving a void for loyal customers and employees who relied on its affordability and convenience.
