Big Lots, the discount chain that filed for bankruptcy in September, has announced a new agreement on Friday that will allow hundreds of its stores to remain open through a sale transaction with an investment firm. The company, based in Columbus, Ohio, had previously disclosed plans to shutter its remaining 963 locations following the collapse of an acquisition deal with private-equity firm Nexus Capital Management.
Under the terms of the new deal, Big Lots will be transferring its properties to other retailers and companies with the assistance of Gordon Brothers Retail Partners. This arrangement includes the transfer of the Big Lots brand, stores, and distribution centers. Variety Wholesalers, a company that owns over 400 retail stores including Bargain Town, Bill’s Dollar Stores, and Maxway, is set to acquire between 200 and 400 Big Lots stores along with up to two distribution centers as outlined in a press release from Big Lots.
The agreement between Big Lots and Variety Wholesalers is expected to safeguard the jobs of thousands of employees who were at risk of being laid off. Variety Wholesalers has indicated its intention to retain Big Lots staff at the stores and distribution centers, as well as certain corporate associates. In a statement, Bruce Thorn, President, and Chief Executive of Big Lots expressed gratitude towards the company’s employees for their perseverance during this challenging period.
While the exact number of Big Lots employees who will retain their positions remains uncertain, it is known that up to 555 corporate employees faced potential job losses according to a layoff notice. Additionally, another 505 employees were at risk in Pennsylvania starting from January 6, as per a separate notice submitted by the company. When contacted by CNN, a spokesperson for Big Lots stated that further details regarding the deal could not be provided at this time.
Big Lots joins the ranks of several prominent retailers that have sought bankruptcy protection amid shifting consumer spending habits in 2024. The impact of high inflation and interest rates on sales has been cited by retail chains as a major factor contributing to their financial struggles. In contrast, consumers have demonstrated a preference for value-oriented shopping over simply seeking lower prices, leading to challenges for bargain stores while benefiting larger retailers like Walmart and Amazon.
The current economic landscape has seen Party City, another well-known retailer, also filing for bankruptcy recently and announcing plans to close all of its 800+ stores. These developments underscore the ongoing challenges faced by many retail businesses in adapting to evolving consumer behaviors and market conditions.
