Discount retailer Big Lots has announced in a filing with the U.S. Securities and Exchange Commission (SEC) that it may close more than 300 stores nationwide.
The discount retail chain is expected to cease operations at 315 locations in the United States, or about 22 percent of its stores.
The company reported a net loss of $205 million for the first quarter of 2024 and an increase in long-term debt to $573.8 million.
The company had previously announced the closure of 40 of its stores in June.
Most of the stores will be closed in California. 75 of 109 stores will be closed, including branches in Anaheim, Bakersfield and Sacramento. In Florida, 26 stores will be closed and 18 in Washington.
Other states with significant closures include Colorado, where all three Colorado Springs locations will close, as well as additional stores in Aurora, Grand Junction, Littleton and Longmont.
The company’s recent filings with the U.S. Securities and Exchange Commission (SEC) show that these store closures come against a backdrop of Big Lots struggling with significant debt and declining sales.
Joseph Foudy, professor at the NYU Stern School of Business, said Newsweek The Big Lots closures were due to “short-term consumer weakness and long-term market trends.”
“The net loss of over $200 million has forced the company to undertake this restructuring as it is concerned about dwindling cash reserves and investors’ demands for a new business strategy. In fact, in its last official SEC filing, it warned about the company’s viability,” he added.
High inflation and strong competition have dampened consumer spending.
“Inflation is easing, but for some consumers the price shock remains,” Foudy said.
ANDREW D. BROSIG/THE MORNING SUN
A Big Lots spokesman said Newsweek The move is part of a broader strategy to financially stabilize the company.
“Big Lots continues to deliver incredible value and remarkable discoveries to our customers as we execute a clear plan to strengthen our business.
“While the majority of our stores are profitable, we have made the difficult decision to close certain underperforming stores. We are confident that the steps we have taken best position the company for the future as we return to our roots, focus on the low-cost space and provide distinctive value to our customers.
“We are very grateful to our dedicated and hard-working employees who are affected by a closure and will do our best to support them. This includes accepting requests to relocate employees to another Big Lots location if desired.
“We also plan to offer severance pay to those who cannot transfer to another branch when their branch closes.
The company is not alone in its situation. The entire retail industry has been in turbulent waters since the COVID-19 pandemic. The pandemic has led to numerous store closures and bankruptcies across the industry.
Photo by Kristoffer Tripplaar/Sipa USA/Sipa via AP Images
“This is part of an ongoing trend that has been affecting major retail chains since before COVID and includes American heavyweights like ToysUS, Sears, JCPenny and Bed, Bath and Beyond,” Foudy said. “These companies have all been affected by the steady rise of e-commerce, changing consumer preferences, as well as some management missteps and, in some cases, excessive leverage. Consumers in the U.S. are starting to hold back on spending.”
Big Lots is offering discounts of up to 20% on all inventory at the stores being closed. These sales are part of the company’s efforts to get rid of merchandise while operations are suspended at the affected stores.
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