COLUMBUS, Ohio — Ohio-based discount retail chain Big Lots has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware as it seeks to reorganize and stabilize its finances after a steep decline in stock value and ongoing challenges in the retail market.
Founded in 1967 as Consolidated Stores Corporation by Sol Shenk, Big Lots started as a wholesale distributor of auto parts before transitioning into the discount retail space. The company opened its first closeout store under the name “Odd Lots” in Columbus, Ohio, in 1982 and later rebranded as Big Lots. Today, the company operates its headquarters in Columbus and remains a well-known name in discount retail.
Big Lots’ decision to file for bankruptcy comes after a series of financial setbacks, including a nearly 92% drop in stock value over the past year. Last month, the company announced plans to close several stores, signaling ongoing struggles in maintaining profitability. On December 27, 2023, Big Lots’ stock closed at just over $8 per share. As of this morning, it had plunged further to $0.46 per share.
Bruce Thorn, President and CEO of Big Lots stated that the bankruptcy filing is aimed at securing the company’s future with new ownership that can bring financial stability. “The actions we are taking today will enable us to move forward with new owners who believe in our business and provide financial stability, while we optimize our operational footprint, accelerate improvement in our performance, and deliver on our promise to be the leader in extreme value,” Thorn said.
As part of the restructuring plan, Nexus has been designated as the “stalking horse bidder” in a court-supervised auction process. This means Nexus has set the minimum bid for the company’s assets, but the process allows for potentially higher offers from other bidders. If Nexus remains the winning bidder, the transaction is expected to close in the fourth quarter of 2024.
To support its operations during the bankruptcy process, Big Lots has secured $707.5 million in financing commitments, including $35 million in new funding from existing lenders. This financing, known as the DIP (Debtor-in-Possession) Financing Facility, is subject to court approval and is intended to provide Big Lots with the liquidity needed to maintain operations while pursuing a sale.
Further details on Big Lots’ bankruptcy proceedings and restructuring plans can be found on their dedicated website, bigstepforbiglots.com, and through the company’s claims agent, Kroll Restructuring Administration LLC.