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Major US discount retailer on brink of bankruptcy with 1,400 stores under threat - as shares drop by 50%
Discount home goods retailer Big Lots is reportedly on the brink of bankruptcy after years of falling sales.
The beleaguered chain may seek Chapter 11 protection within weeks, according to Bloomberg, if it is not able to find investors.
The Ohio-based company runs around 1,400 stores across the US, after closing hundreds of locations earlier this year.
Big Lots stock plummeted as much as 50 percent Thursday morning, falling to $0.56 a share at time of publication.
CEO Bruce Thorn warned during the company's last earnings call that Americans were cutting back spending on big ticket items, especially for furniture, which was hurting sales.
Discount home goods retailer Big Lots is reportedly on the brink of bankruptcy after years of falling sales and store closures (Pictured: A store closure in Manassas, Virginia)
Big Lots received a loan earlier this year to help navigate its liquidity problems, Bloomberg reported, and it has been seeking additional financing in recent weeks.
The chain has seen its takings fall consistently for each of the past ten quarters. It lost an eye-watering $132 million in the first three months of 2024.
Representatives from the company did not respond to the outlet's requests for comment on its plans.
It comes after Big Lots identified scores of locations across states such as Connecticut, Massachusetts, Michigan, New Hampshire and Vermont which are due to close.
Earlier this month, stores that are going out of business displayed a 'closing this location' banner on the chain's website, alongside a 20 percent off promotion.
The latest closures were on top of 40 further stores which closed their doors in June.
On the closures, a company spokesperson told Retail Dive earlier this month: '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 are taking will best position the company for the future as we return to our roots, focus on owning the bargain space, and deliver unmistakable value to our customers.'
During Big Lots' last earnings call, CEO Bruce Thorn said it wants to expand its extreme bargain offerings as Americans are cutting back on big ticket items.
'We believe Big Lots is in a tough spot,' Joe Feldman, an analyst at Telsey Advisory Group, said in a note at the time.
Big Lots stock plummeted as much as 50 percent Thursday morning, hitting $0.56 a share at time of publication
The store sells furniture and homeware alongside toys, beauty products and groceries
Big Lots is know for its reduced price items
On Reddit, Big Lots store managers have complained that they are getting more and more stock that customers do not 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.
'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.'
Problems for Big Lots come amidst a widespread 'retail apocalypse' which is seeing stores struggle with consumer pullback and increasingly tight margins.
There were almost 2,600 store closures in the first four months of 2024. If that trend continues, almost 8,000 will have been lost by the end of the year.
In recent months, Walmart has closed three more of its underperforming locations. Best Buy closed ten in March.
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.
The 1,000 closures of Family Dollar and its sister company Dollar Tree will happen over the next three years.