Big Lots, the chain of home furnishings and furniture discount stores, is in financial trouble as it navigates bankruptcy proceedings. In connection with its September 2024 Chapter 11 filing, the retailer has announced that it will close nearly 300 more stores in 2025. Here’s why Big Lots is financially struggling, how many stores are closing, and how customers can find out if their store is on the list.
The financial concerns and chapter 11 filing
Big Lots filed for Chapter 11 bankruptcy in September 2024 owing a humongous debt of $3.1 billion to around 10,000 creditors. The firm has witnessed declining sales, which have dropped by an average of about $114.5 million between the years 2023 to 2024. Both interest charges and inflation rates have compelled the consumers to reduce discretionary expenditure in their participation in home products.
CEO Bruce Thorn reported that the majority of their stores are remaining in the black, but the company needs to optimize operations to become cost-efficient and deliver quality customer service. This comes after Nexus Capital Management LP canceled a buyout bid, leaving Big Lots to seek new investors or risk being sold out completely.
Store closures: What to expect
As part of the restructuring, Big Lots said it would close a total of 545 stores from its overall 1,400 or so stores. The most recent update adds on about 300 more closings for the year alone. The state-by-state list indicates that California will see the most closures, with 75 closing stores. Other states affected are:
- Florida: 26 stores
- Arizona: 17 stores
- Georgia: Several stores
- Illinois: Several stores
- Texas: Several locations
This shutdown wave is indicative of deeper problems facing the retail sector, where many companies are struggling to maintain pace with changing customer habits toward greater online purchases rather than store interaction.
The impact on employees and communities
The closure of Big Lots stores will definitely have long-term effects on workers as well as the local population. Big Lots is dismissing thousands of workers as it reduces operations in an attempt to strengthen its finances. The agreement with Gordon Brothers Retail Partners LLC aims to maintain jobs by selling 200 to 400 stores to Variety Wholesalers Inc., which will keep operating such stores under the Big Lots brand name.
But the prospects for most of these workers at store closures are uncertain. The economic impact to communities that rely on these malls for employment and services cannot be overstated, especially in communities with few other employment opportunities.
Consumer reactions and shopping experience
Consumers’ reaction to Big Lots’ bankruptcies and store closures varied. Some were willing to buy Big Lots’ low price but complained about the quality of the shopping experience. Consumers’ word is that they saw reduced merchandise and a neater store and are discouraged to return.
While the consumer is weighing their options during this moment of uncertainty for Big Lots, consumers may also weigh other discount stores or online retailers offering these same products at these same prices.
How to know if your local store is closing
Consumers concerned with whether the local Big Lots store is closing can find out a few things:
- Go to the official website: Big Lots has also been posting announcements on its website about store closures and continuing liquidation sales.
- Call local stores directly: Customers can call the local Big Lots store for information about their current operational status.
- Monitor local news sources: Various local news sources are reporting on store closures and offering updates on impacted businesses within the community.
Ahead of the curve: The future of Big Lots
Big Lots’ future is uncertain while it navigates bankruptcy. The Gordon Brothers’ transaction is a lifeline to much of its chain, but there are legitimate barriers to clear. The retail landscape is actually being transformed, and Big Lots and others like it must transform or continue its losses.
As consumers adapt to these shifts in the retail landscape, businesses such as Big Lots will need to become innovative about how they entice consumers without increasing prices. Either through enhanced online shopping or enhanced in-store experiences, the capacity to adapt will be what makes or breaks whether Big Lots will come out of this crisis stronger than ever.
