Big Lots files for Chapter 11 bankruptcy

Big Lots, Inc., has initiated voluntary Chapter 11 bankruptcy, the company announced on Monday.

The Columbus, Ohio-based retailer has entered into an agreement with an affiliate of Nexus Capital Management LP and Nexus has agreed to acquire substantially all of Big Lots’ assets and ongoing business operations.

Big Lots stores will remain open during this process.

“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,” Bruce Thorn, president and chief executive officer of Big Lots, said in a statement. “Though the majority of our store locations are profitable, we intend to move forward with a more focused footprint to ensure that we operate efficiently and are best positioned to serve our customers. To accomplish this, we intend to use the tools afforded by this process to continue optimizing our store fleet in an orderly manner.”

While Big Lots’ underlying performance has been improving, its board of directors conducted a broad strategic review of alternatives and determined that entering into the sale agreement with Nexus and initiating a court-supervised sale process was the best path forward to maximize value and ensure continued operations.  

The transaction by Nexus is subject to higher or better offers, court approval, and other conditions, and if Nexus is deemed the winning bidder, the transaction should be made official during the fourth quarter of 2024.

In connection with the court-supervised process, Big Lots has secured commitments for $707.5 million of financing.

The company has also filed a number of customary motions seeking court approval to continue supporting its operations, including continued payment of employee wages and benefits, and payment to vendors.

Big Lots will report second quarter results on Sept. 12.