The giant orange signs dot the suburban landscape around America, but there may be fewer Big Lots outlets to shop at soon as the discount retailer just announced it is filing Chapter 11 bankruptcy.
Big Lots stores sell everything from packaged food to kitchen appliances, furniture, and office supplies at a discounted rate. It has almost 1,400 stores across 48 states today, but it’s anyone’s guess how many of these will remain as the bankruptcy process moves through the courts.
Skyrocketing inflation during the Biden administration’s response to the pandemic seems to have a lot to do with the chain’s decision. Inflation affects every step of a company’s supply chain, driving up prices not only on merchandise but the costs of staff and shipping. Though the most recent reports put inflation down to a relatively tame 2.5 percent, that does not mean that the prices formerly boosted by the record inflation of 2021 have come down. They have not. It is only the rate at which prices are increasing that has slowed, but prices did not fall, and they’re still going up.
Big Lots has lost sales for the last nine quarters as Americans curb their discretionary spending. President Bruce Thorn is talking up the sale of Big Lots to Nexus Capital, which might then auction off the company under the bankruptcy court’s supervision.
In a statement, Thorn, also the CEO of Big Lots, said he was proud of the company’s ability to give customers substantial savings, and also referred to what he called Big Lots’ “philanthropic efforts” to build stronger communities (he gave no detail). He said the bankruptcy was necessary to give the company “financial stability” under a new owner.
Nexus Capital’s managing director, Evan Glucoft, said his company is “partnering” with Big Lots to bring the “iconic brand” back to a stable business model so that it can continue as “America’s leading extreme value retailer.”
Some analysts say there was no way for Big Lots to avoid bankruptcy. GlobalData’s Neil Saunders said the chain’s product mix is too “jumbled,” and that shoppers can often find better-quality products at lower prices at competing retailers such as Wal-Mart.
