About three months after Big Lots noted "substantial doubt about the Company's ability to continue" in a U.S. Securities & Exchange Commission (SEC) filing, the company said on Monday it has secured $707.5 million to support its operations and sell its business to private equity firm Nexus Capital.
This comes as the company has initiated bankruptcy proceedings under Chapter 11. Big Lots listed its assets and liabilities in the range of $1 billion to $10 billion, according to a filing with bankruptcy court in Delaware, which showed creditors in the range of 5,001-10,000.
Big Lots cited troubles that began during the COVID-19 pandemic, and "macroeconomic factors such as high inflation and interest rates that are beyond its control."
As a result, Big Lots says consumers are spending less on home and seasonal products, which is a "significant portion of the Company's revenue."
BIG LOTS WEIGHING POSSIBILITY OF BANKRUPTCY FILING AS SALES DWINDLE
"We are proud of the work we do every day across Big Lots to provide our customers with unmistakable value and exceptional savings, as well as building stronger communities through our philanthropic efforts," Big Lots President and CEO Bruce Thorn said in a press release.
"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."
BIG LOTS CLOSING DOZENS OF STORES, PUTTING SURVIVAL IN QUESTION
Earlier this summer, Big Lots told the SEC it planned to close 35 to 40 stores, which quickly grew to hundreds. Additional store closures are expected "as part of the court-supervised sale process."
The retailer operates around 1,400 stores across the U.S. and employs more than 30,000 workers.
Nexus will serve as a "stalking horse bidder" in a court-supervised auction process, Big Lots said, adding that the deal will close in the fourth quarter of 2024 if Nexus is deemed the winning bidder. A stalking horse bid is used as a starting or minimally accepted offer that other interested bidders must surpass if they want to buy the asset or the company.
Big Lots said its second quarter results are in line with the guidance. The company will release its full second-quarter results on Sept. 12, after previously postponing it from Sept. 6.
CLICK HERE TO READ MORE ON FOX BUSINESS
"We are excited to have the opportunity to partner with Big Lots and help return this iconic brand to its status as America's leading extreme value retailer. The Big Lots business has incredible potential and we are confident that its greatest days are ahead," Evan Glucoft, Managing Director of Nexus, said in a statement.
Reuters contributed to this report.
