Discount home goods retailer Big Lots has announced plans to close between 35 and 40 stores this year. The company cited elevated inflation as a key factor that has reduced customers' buying power, impacting its business operations.
Big Lots Faces Store Closures Amid Financial Struggles
The Ohio-based discount retailer Big Lots, which operates around 1,400 stores nationwide, has revealed concerning financial details in its recent SEC filing from June.
The New York Post reported that the company disclosed plans to close between 35 and 40 stores this year, adding to the 52 closures from 2023.
The report pointed to "elevated inflation" as a significant factor diminishing customers' purchasing power, which has contributed to considerable company losses and raised doubts about its ability to continue operating.
In the first quarter, Big Lots reported a net sales decrease of $114.5 million, or 10.2%, compared to the same period in 2023. The retailer has been experiencing ongoing financial difficulties, losing money and depleting cash reserves since 2022.
These challenges have escalated concerns about potential bankruptcy. The company's stock performance further highlights its struggles, with a 52% decline over the past month and an 84% drop compared to last year.
According to The U.S. Sun, when Big Lots closed several stores last year, President and CEO Bruce Thorn explained that these actions were part of a multi-year strategy. In late 2023, the company disclosed plans to shut down locations in New York, North Carolina, and Illinois.
A company spokesperson stated that Big Lots routinely evaluates its store network to ensure it optimally serves customers and its broader business objectives.
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Big Lots described the closures as aligning with typical retail practices. Additionally, a specific store in Leesburg, Virginia, located in the Battlefield Shopping Center, about 40 minutes northwest of Washington DC, also announced it would close its doors in April.
Founded in 1967 by visionary Sol Shenk, Big Lots started as Consolidated International, Inc., thriving on closeout deals, especially in auto parts and vehicles, per the Big Lots website.
By 1982, the company had launched its Odd Lots/Big Lots chain. In 2001, it unified under the Big Lots brand, enhancing consistency for customers and culture for over 35,000 associates.
Retail Landscape Shifts Amid Economic Pressures
As inflation keeps prices high, consumers increasingly tighten their budgets, impacting retailers nationwide. Big Lots is among the numerous retailers feeling the pinch from reduced consumer spending.
In a significant move reflecting the economic strain, The 99 Cents Only Store declared bankruptcy in April and announced the closure of all 371 locations across the country.
The company cited escalating inflation rates and challenges in maintaining profitable margins as the primary reasons for its shutdown.
Following the announcement, the Associated Press noted that Dollar Tree Inc., a competitor, stepped in to acquire the properties of nearly 170 bankrupt 99 Cents Only Stores.
Despite facing its financial challenges and closing about 1,000 locations since 2023, Dollar Tree sees this acquisition as a strategic growth opportunity.
Michael Creedon, the COO, noted that the acquisition would allow Dollar Tree to expand its presence in the western United States significantly.
He highlighted that the newly acquired properties are situated in premium retail centers, which will enhance the reach and visibility of the Dollar Tree brand, benefiting more communities and customers.
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