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Nationwide discount retailer with 1,400 stores sparks fears of mass closures as it mulls bankruptcy
A nationwide discount homeware chain with almost 1,400 stores is the latest to warn of money problems.
Big Lots has told financial regulators it may not be able to continue as a 'going concern' - raising the risk of store closures and bankruptcy.
The Columbus, Ohio-based chain has seen its takings fall consistently for each of the past ten quarters. And it lost an eye-watering $132milloin in the first three months of 2024.
Managers of its stores say they are not surprised. They have complained that the company's bosses at HQ send truck-loads of products that customers don't want.
In a recent filing with regulators, Big Lots said that the losses so far this year - on top of further losses in 2022 and 2023 - meant it had used up most of its spare cash. Retailers need money in the bank to cover the cost of stock.
Big Lots has 1,389 stores across 48 states in the US
Execs at Big Lots said the retailer 'expects to experience further operating losses and expects to experience difficulty remaining in compliance' with credit agreements later this year.
Big Lots has tried to cut costs, boost customer spending and get cheaper credit - but that might not be enough, the company said in the filing to the Securities and Exchange Commission.
All this 'raises substantial doubt about the company's ability to continue as a going concern,' the retailer said.
On Wednesday, ahead of the market closing for the holiday, the stock was $1.71 - down 48 percent over the past month and 81 percent this year.
It had peaked at $72.31 during a post-pandemic rally in 2021.
Last year, Big Lots shuttered 52 stores. This year so far it has closed 13.
Big Lots and other discount retailers are struggling in America. They are even more exposed to Americans cutting back on spending than stores who attract middle-class shoppers.
Lower-income customers have been cutting back after two and a half years of punishing price rises.
In February, Big Lots began looking for fresh financing, according to Bloomberg News.
On Reddit, Big Lots store managers have complained that they are getting more and more stock that customers don't buy.
'In the last month we received four of the largest trucks we have seen all year and triple the amount we normally get,' one wrote on Tuesday this week.
'The warehouse is pretty much full to capacity and none of [it] is selling.'
Another posted: 'Isn't that the weirdest thing? So much stuff, but none of it is what people want.
'Perhaps instead of blowing our budget on cheap garbage nobody wants, corporate will look into what's popular and will only buy that.'
Problems for Big Lots comes amidst a widespread 'retail apocalypse' which is seeing bricks-and-mortar stores struggle to combat rampant theft and increasingly tight margins.
There have been almost 2,600 store closures so far in 2024.
In recent weeks, Walmart has closed three more of its underperforming locations, while Rite Aid said it is shutting another 27 pharmacies.
Dollar stores have been hit hard too, with 99 Cents Only announcing in April it would shutter all 371 of its locations across California, Texas, Arizona and Nevada.
Big Lots is know for its reduced price items
Bob's Stores and sister retailer Eastern Mountain Sports have together shut ten stores in June. This is an earlier closure at 499 Sunrise Highway in Patchogue, New York in 2019
Similarly, 1,000 Family Dollars and Dollar Trees will permanently shut over the next few years.
And last week it emerged that Pinto Ranch, an iconic Texas store loved by Drake, abruptly shuttered after two decades.
Bob's Stores, which sells athletic and casual clothing across six states, said it is shutting all its stores.
But will clear stock first with 70 percent off bargains