Nationwide discount retailer with 1,400 stores sparks fears of mass closures as it mulls bankruptcy

A national discount home furnishings chain with nearly 1,400 stores is the latest to warn of financial problems.

Big Lots has notified financial regulators that the company may not be able to continue as a going concern, raising the risk of store closures and bankruptcies.

The Columbus, Ohio-based chain has seen revenues steadily decline over the past 10 quarters, and it lost a staggering $132 million in the first three months of 2024.

Store managers say they are not surprised. They have complained that company bosses at headquarters are sending trucks full of products that customers do not want.

In a recent filing with regulators, Big Lots said its losses so far this year — on top of further losses in 2022 and 2023 — meant it had used up most of its excess cash. Retailers need cash in the bank to cover the cost of inventory.

Big Lots executives said the retailer “expects further operating losses later this year and will find it difficult to meet” its credit agreements.

Big Lots has tried to cut costs, increase customer spending and get cheaper credit, but that may not be enough, the company said in the submit with the Securities and Exchange Commission.

All of this ‘raises significant doubts about the company’s ability to continue operating as a going concern’, the retailer said.

On Wednesday, just before the market closed for the holidays, the stock was trading at $1.71, down 48 percent from the past month and 81 percent this year.

During a post-pandemic rally in 2021, the price peaked at $72.31.

Last year, Big Lots closed 52 stores. So far this year, 13 have closed.

Big Lots and other discount retailers are struggling in America. They are even more exposed to Americans who cut back on their spending than stores that attract middle-class shoppers.

Lower-income customers are cutting back after two and a half years of steep price increases.

According to Bloomberg News, Big Lots began seeking new financing in February.

On Reddit, Big Lots store managers are complaining that they are increasingly receiving inventory that customers are not buying.

“This past month we have received four of the largest trucks we have seen all year, three times the normal number,” one person wrote on Tuesday of this week.

The warehouse is almost full and no one from [it] sells.’

Another posted: ‘Isn’t that the weirdest thing? So much stuff, but none of it is what people want.

‘Maybe instead of wasting their budget on cheap junk that no one wants, companies will focus on what’s popular and only buy that.’

The troubles for Big Lots come amid a widespread “retail apocalypse,” with brick-and-mortar stores struggling with rising theft and ever-tightening profit margins.

There have been nearly 2,600 store closures so far in 2024.

Walmart has closed three more underperforming locations in recent weeks, while Rite Aid announced it will close 27 more pharmacies.

Dollar stores have also been hit hard: 99 Cents Only announced in April that it would close all 371 of its locations in California, Texas, Arizona and Nevada.

Big Lots is known for its discounted items

Bob’s Stores and sister retailer Eastern Mountain Sports have closed a combined 10 stores in June, following an earlier closure at 499 Sunrise Highway in Patchogue, New York in 2019

Also, 1,000 Family Dollars and Dollar Trees will close permanently in the coming years.

And last week it was announced that Pinto Ranch, an iconic Texas store beloved by Drake, closed abruptly after two decades.

Bob’s Stores, which sells sports and casual clothing in six states, has announced it will close all of its stores.

But will first clear out the stock with a 70 percent discount