Big Lots Files for Bankruptcy as Economic Pressures Mount
Discount retailer, Big Lots has filed for Chapter 11 bankruptcy amid ongoing financial struggles, becoming the latest casualty of shifting consumer behaviour and rising inflation. As part of the restructuring, private equity firm Nexus Capital Management will acquire most of Big Lots’ stores and operations, allowing the company to continue trading while reorganizing.
In a press release, CEO Bruce Thorn expressed optimism about the future under new ownership, stating, “These actions will allow us to move forward with financial stability while optimizing our operations and improving performance.”
Big Lots attributed its bankruptcy to several economic factors, including high inflation and interest rates, which have led its core customers to cut discretionary spending on home and seasonal products—key categories for the retailer. While consumers are seeking value, they are gravitating toward bigger players like Walmart and Amazon, leaving discount chains like Big Lots to struggle.
The retailer is already in the process of closing around 300 of its 1,400 U.S. stores, with more closures possible as the company works to streamline operations. Despite these challenges, Big Lots has secured $707.5 million in financing to maintain operations and pay employees during the restructuring process.
Nexus Capital is positioned as the lead bidder in the acquisition, with the sale expected to close by year-end. However, analysts suggest that alternative bidders are unlikely due to the short timeline. Big Lots now joins a growing list of retailers, including LL Flooring, that have faced financial difficulties in the current economic climate.
