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COLUMBUS, Ohio -- Discount retailer Big Lots has filed for Chapter 11 bankruptcy protection, arsenic it contends with a pullback successful user spending and brushed sales.
The Columbus, Ohio-based institution plans to merchantability its assets and ongoing concern operations to backstage equity steadfast Nexus Capital Management.
Big Lots, which sells furniture, location decor and different items, said successful a connection connected Monday that precocious ostentation and involvement rates person wounded its concern arsenic consumers person pulled backmost connected their location and seasonal merchandise purchases, 2 categories the concatenation depends connected for a important portion of its revenue.
A wide presumption of the exterior of the North Bergen Big Lots store during the Big Lots Store Opening connected Friday, Oct. 17, 2014 successful North Bergen, N.J.
Bennett Raglin/AP Images for Big Lots
Sales astatine stores unfastened astatine slightest a year, a cardinal gauge of a retailer's health, person declined for 9 consecutive quarters, according to FactSet.
Big Lots said that its show has been improving, but that its committee determined during a strategical reappraisal that the projected merchantability to Nexus was the close determination for the business. The institution had postponed the merchandise of its second-quarter results to aboriginal this week.
The institution volition proceed to merchantability goods astatine its stores and connected its website during the court-supervised merchantability process. The concatenation added that it does program to adjacent immoderate stores, but didn't specify however galore oregon what locations would beryllium impacted. At the extremity of 2023, Big Lots operated astir 1,400 stores successful 48 states.
"The actions we are taking contiguous volition alteration america to determination guardant with caller owners who judge successful our concern and supply fiscal stability, portion we optimize our operational footprint, accelerate betterment successful our performance, and present connected our committedness to beryllium the person successful utmost value," Big Lots President and CEO Bruce Thorn said successful a statement.
Nexus Capital volition service arsenic a "stalking horse" bidder successful a court-supervised auction, with the projected merchantability taxable to higher offers oregon different bids that could beryllium considered better. If Nexus winds up arsenic the winning bidder, the woody is anticipated to adjacent successful the 4th quarter.
Neil Saunders, managing manager of GlobalData, said successful an emailed connection that Big Lots seems to person mislaid immoderate customers astatine a clip erstwhile consumers are comparing prices more.
"Big Lots operates successful a precise crowded and competitory marketplace wherever different worth players bash a acold amended occupation of delivering connected debased prices and compelling bargains. It needs to measurement up its crippled if it is to win post-bankruptcy," helium said.
Big Lots Inc. has secured commitments for $707.5 cardinal of financing, including $35 cardinal successful caller financing from immoderate of its existent lenders. Once approved by the court, the financing, on with currency from its ongoing operations, is expected to supply capable liquidity to enactment the institution portion it works to implicit the sale.
The concatenation has besides received a announcement from the New York Stock Exchange due to the fact that the mean closing terms of its shares was beneath $1 implicit a consecutive 30 trading-day period. The announcement doesn't mean that Big Lots' banal volition beryllium instantly delisted arsenic the institution tin appeal. In premarket trading shares slid 40% to 30 cents.
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