Big Lots, the discount home goods retailer has become the latest major retail chain to file for bankruptcy…
But to industry analysts, this is anything but surprising.
Here’s what went down.
Big Lots’ Bankruptcy
Earlier this month, Big Lots announced that the company had filed for Chapter 11 bankruptcy protection…
And that the company agreed to be sold to an affiliate of Nexus Capital Management…
A private equity firm with plans to turn Big Lots around.
Since 2022, Big Lots has reported growing losses every quarter. In 13 weeks, the company reported a net loss of $205 million with $1 billion in net sales…
In other words, outstandingly bad results.
These losses triggered store closures. Big Lots went from operating 1,425 stores in 2023 to 1,300.
TO MAKE MATTERS WORSE, COMPANY STOCK HIT A 33-YEAR LOW.
When the company announced the news, trading for the company halted on the New York Stock Exchange.
The losses are due to consumers reeling back their spending post-pandemic…
Facing higher inflation, an uncertain job market, and pessimism about the economy.
Not to mention, Big Lots is struggling in competition with other discount retailers. The company was not offering any signature products…
And customers were able to find cheaper alternatives for the selection they did provide.
What Comes Next?
But it isn’t over yet, companies bounce back from bankruptcy all the time, with Red Lobster being a recent example.
Big Lots has a new owner and has secured $707.5 million in funds for the company’s restructuring.
Let’s just hope this game plan is enough to save Big Lots from sinking.
Be Great,
GCTV Staff
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