About three months ago, Big Lots expressed concerns about its future in an SEC filing. The company said it had "substantial doubt" about its ability to continue. Now, they've secured $707.5 million to support operations and sell the business to private equity firm Nexus Capital.
Big Lots has also filed for Chapter 11 bankruptcy. In the filing, the company listed assets and liabilities between $1 billion and $10 billion. Creditors range between 5,001 to 10,000, according to court documents.
The company pointed to the COVID-19 pandemic as the start of its troubles. Inflation and high interest rates have worsened the situation. These "macroeconomic factors" have led to less consumer spending, especially on home and seasonal products.
These products make up a large part of Big Lots' revenue. "We are proud of the work we do every day to provide value to our customers and build stronger communities," said Bruce Thorn, President and CEO of Big Lots.
Thorn also noted that the company’s new owners will bring financial stability. "The actions we are taking today will help us optimize our operations and improve performance," he added.
Earlier this summer, Big Lots announced plans to close 35 to 40 stores. That number quickly grew to hundreds, with more closures expected during the court-supervised sale process.
Big Lots currently operates around 1,400 stores across the U.S. It employs over 30,000 workers. Nexus Capital will serve as a "stalking horse bidder" during the auction process. If successful, the deal will close by the end of 2024.
Nexus Managing Director Evan Glucoft expressed excitement about the deal. "We are confident that Big Lots’ greatest days are ahead," he said.