Big Lots closing about 300 stores; California takes big hit
Big Lots is downsizing.
In a new filing with the Securities and Exchange Commission, the Ohio-based discounter revealed it may shutter up to 315 stores under amended credit and loan terms. In a June SEC filing, Big Lots, which has about 1,390 stores nationwide, said it was planning to close between 35 to 40 stores in 2024. In the same filing, the company also warned of its ability to survive as a "going concern.”
Since the June filing, Big Lots has updated the store location section on its website, which now shows nearly 300 stores earmarked for closure (as of Aug. 2). California ranks as the state with the most shutterings, with 75 of its 109 stores going dark. By contrast, no closings are cited in Texas, where the company operates 116 stores, the most of any state.
Under the revised financial terms in the new filing, Big Lots and its lenders agreed to reduce the retailer’s available credit to $800 million from $900 million. The interest rate on borrowing rose 50 basis points and Big Lots must also report more frequently to its lenders.
Big Lots has been working to shore up its liquidity during the past few months. Sales tumbled 10.2% to $1 billion in its first quarter, which ended May 4, with a 9.9% decrease in comparable sales. The retailer cited a continued pullback in consumer spending by its core customers.
“While we made substantial progress on improving our business operations in Q1, we missed our sales goals due largely to a continued pullback consumer spending by our core customers, particularly in high ticket discretionary items," CEO Bruce Thorn said in the earnings release.
In its June filing, Big Lots noted it had net losses and used cash in operating activities in 2022, 2023 as well as the first quarter of 2024. While it currently is in compliance with its credit agreements, the retailer said that it "expects to experience further operating losses and expects to experience difficulty remaining in compliance with such covenants."
