Discount retailer Big Lots is facing a challenging future as it announces the closure of more than 300 stores across the United States. This decision comes after the company reported a significant drop in sales, revealing a 10 percent decline that translates to a staggering $205 million loss in just one quarter. The closures will account for nearly a quarter of all its locations, highlighting the dire situation the retailer finds itself in.
In a recent regulatory filing, Big Lots disclosed plans to escalate the number of store closures to 315 as part of a restructuring agreement related to a loan. While a detailed list of the affected stores has yet to be released, the company has begun offering closing sales at hundreds of locations to clear out inventory.
Big Lots has stated that it is actively taking steps to enhance its operational efficiency and is consistently reviewing its store footprint. The retailer aims to ensure it is best positioned to serve its customers and support its business effectively. Unfortunately, the company's shares have plummeted by approximately 90 percent this year, signaling a lack of investor confidence in its recovery.
The spokesperson added that while most of their stores are profitable, they are making the difficult decision to close "underperforming" locations to focus on their core business. The ongoing trend of consumers cutting back on non-essential spending has not only impacted Big Lots but has also led to struggles for other brick-and-mortar retailers, as competition from online platforms like Amazon continues to thrive.
CEO Bruce Thorn mentioned that the company had missed its sales targets due to reduced consumer spending, particularly on high-ticket discretionary items. Furthermore, the regulatory filing indicates a "significant likelihood" that Big Lots may default on a 2022 loan, raising serious concerns about the retailer's long-term viability.
Big Lots has been a staple in the retail industry for 57 years. However, the recent closures echo a broader trend affecting many retailers, including Conn’s HomePlus and Bob’s Stores, which also faced bankruptcy this year. As the retail landscape evolves, it remains to be seen how Big Lots will adapt to these challenges and whether it can reclaim its position in the bargain retail space.
