A beloved retailer is now closing nearly 40 stores following a tough Q1 and the high risk of of defaulting on its current loans.
Big Lots will close 35 to 40 stores in 2024 following a tough first quarter this year.
The discount retailer admitted it had lost money in 2022 and 2023 as well.
For Q1 2024, which ended May 4, 2024, Big Lots had a 9.9% decrease in comp sales compared to the same period in 2023.
Net sales fell 10.2% in Q1 2024 compared to Q1 2023, dropping from $1.12 billion to $1 billion.
The retailer operates nearly 1,400 stores in 48 states, with key product categories including furniture and home goods, food and seasonal items.
Big Lots’ management has “implemented plans to reduce costs, improve sales and enhance its financial flexibility and liquidity,” according to the SEC filing, but it’s uncertain whether these actions will be enough to right the retailer’s course.
Over the past year, Big Lots has sold some of its real estate, cut expenses and taken other steps to improve cash flow.
However, those efforts may prove insufficient, according to an SEC filing.
“Based on our current cash and liquidity projections, and uncertainties with respect to the mitigating effect of management’s plans, the company has concluded there is a significant likelihood that it will be unable to comply with the Excess Availability Covenant under the 2022 Credit Agreement and the Term Loan Facility within the next 12 months, which raises substantial doubt about the company’s ability to continue as a going concern,” Big Lots wrote.
Falling out of compliance could trigger its loans being called and could force the company to file for Chapter 11 or even Chapter 7 bankruptcy, per TheStreet.
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Also Read: An Unexpected Retailer Is Now Closing All Stores in Illinois
Other Economy News Today
An unexpected restaurant now abruptly closes 7 locations in one state after revealing plans to shutter a total of 36.
TGI Fridays is closing a total of seven restaurants in one state as part of the company’s ongoing growth strategy.
This comes after the chain abruptly closed 36 locations across 12 states in at the beginning of the year, per The-Sun.
The restaurant chain will pull the plug on seven locations across the state of New Jersey in the coming weeks.
Today, Fridays will welcome in famished diners at its location in Brick for the final time.
“As we continue along our path of transformation to revitalize the Fridays brand and implement a long-term growth strategy, we see a bright future for TGI Fridays,” said Weldon Spangler, CEO of TGI Fridays earlier this week.
“We are at the helm of a pivotal moment that will allow us to explore boundless advancement, expansion, and innovation to keep delivering ‘That Fridays Feeling’ that our fans know and love.”
Before the closures, TGI Fridays had about 270 US locations, according to the company’s website.
“As part of the store closures, TGI Fridays is offering more than 1,000 transfer opportunities, which represents over 80% of total impacted employees,” the company previously said in a statement.
“Our top priority has always been delivering a superior experience for each and every TGI Fridays guest, and we’ve identified opportunities to optimize and streamline our operations to ensure we are best positioned to meet – and exceed – on that brand promise,” said Ray Risley, US president and chief operating officer, in the release.
Eight other locations were sold to former CEO Ray Blanchette, a longtime stakeholder who will acquire the previously corporate-owned restaurants.
The sale comes as major changes have been made to the brand’s leadership, including the news of Weldon Spangler being made CEO.
“As we continue along our path of transformation to revitalize the Fridays brand and implement a long-term growth strategy, we see a bright future for TGI Fridays,” said Spangler in a statement.
Also Read: Retirees Will Now Receive More Money For Social Security
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