A massive discount retailer is now closing over 500 stores after officially filing for Chapter 11 bankruptcy, following initial rumors.
After weeks of speculation, Big Lots has officially announced that it is filing for Chapter 11 bankruptcy.
As part of this restructuring effort, the company will be closing 295 locations in a move described as “optimizing our store footprint.”
Additionally, around 250 more stores are expected to shut down by January 15, 2025.
Currently, Big Lots operates 1,389 stores across 48 states, with only Alaska and Hawaii lacking outlets.
In a press release, the company stated, “While most of our locations are profitable, we aim to streamline our operations to serve our customers more effectively.”
The bankruptcy process will provide the company with tools to manage its store closures in an orderly fashion.
This filing follows an earlier warning from Big Lots in a report to the U.S. Securities and Exchange Commission, indicating that 35 to 40 stores could close within the year.
The company is presently up for auction, with Nexus Capital Management LP making a “Stalking Horse Bid” to establish a minimum sale price.
This initial bid will set a benchmark for other potential buyers.
If no higher bids are received by the auction deadline of October 15, Nexus’s offer will likely be accepted.
Big Lots has reported approximately $3.1 billion in debt owed to between 5,001 and 10,000 creditors.
The company’s net sales dropped by $114.5 million from the first quarter of 2023 to Q1 of 2024, with declines noted across all merchandise categories.
In its June filings, Big Lots acknowledged that its home products—encompassing furniture and seasonal items—have been adversely affected by macroeconomic challenges that impact customers’ discretionary spending.
The discount retailer holds about $3.18 billion in assets but, like many companies facing bankruptcy, has struggled due to high inflation and rising interest rates.
Shifts in consumer spending patterns have further contributed to the decline in sales for Big Lots.
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Also Read: A Struggling Gas Station Chain Now Files An Unexpected Bankruptcy
Other Economy News Today
A massive rental company with 34k locations now shuts down its operations after filing for bankruptcy and 22 years in business.
Users of movie rental company Redbox were left saddened after it was announced that it would be shutting down operations.
The announcement comes after the rental company’s parent company, Chicken Soup for the Soul Entertainment, filed for Chapter 11 bankruptcy.
According to court documents obtained by the Washington Post, the Connecticut-based company claimed to be one billion dollars in debt.
As a result, Redbox, which was a staple of many grocery stores including Walgreens, and CVS will be shuttered.
Many fans took to social media to express how upset they were with the loss.
“I knew it was coming, sadly,” UltraVada wrote in a post on X, formerly Twitter.
“It was inevitable,” a second person mourned.
“I knew this would happen when I heard they filed for Bankruptcy but its still sad to hear. I have a lot of fun memories of Redbox,” a third person lamented.
“I still don’t think this will be or ever be the end of physical media as we do still get remasters of some movies in 4k/Bluray.”
One person revealed that they had forgotten the rental service had existed.
Some users were not surprised by the announcement.
“Not surprised since nobody really rents videos anymore with the rise of streaming and what not,” one user admitted.
“Also kinda remember getting into a feud with them on here.”
One user also pointed out that the last remaining Blockbuster, located in Bend, Oregon, managed to outlive Redbox.
Redbox was acquired by Chicken Soup for the Soul Entertainment (CSSE) in 2022 and became one of the company’s flagship video-on-demand streaming services.
At its peak, CSSE operated more than 20,000 DVD rental kiosks across the country.
The company’s filing means that the company’s more than 1,000 employees will be laid off, per The Wall Street Journal.
It was also reported by Deadline that many employees at CSSE hadn’t received their paychecks and had medical benefits cut in late June.
Also Read: This Massive Mall Retailer Is Now Closing In California
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