Big Lots files for bankruptcy, sells to PE firm as it promises to keep offering 'extreme bargains'

Company Overview - Big Lots Inc. is preparing to file for bankruptcy and plans to sell its chain of stores through a court-supervised process due to high interest rates and a sluggish housing market affecting demand for its products [1][6] - The company operates over 1,300 stores across 48 states and generated approximately $4.7 billion in revenue in fiscal 2023, but has seen a consistent decline in sales post-pandemic [3][6] Bankruptcy Details - Big Lots has agreed to sell its business to private equity firm Nexus Capital Management for about $760 million, which includes $2.5 million in cash along with its remaining debt and liabilities [2] - As part of the bankruptcy process, Big Lots will close nearly 300 stores to improve its balance sheet and reduce costs [4] Management Statements - CEO Bruce Thorn stated that the actions taken will allow the company to move forward with new owners who believe in its business and provide financial stability [5] - Nexus Capital's managing director expressed confidence in Big Lots' potential for recovery and aims to restore the brand's status as a leading extreme value retailer [5] Market Challenges - Big Lots has faced challenges due to macroeconomic factors such as high inflation and interest rates, which have led its core customers to reduce discretionary spending [7] - The company operates in a highly competitive market, struggling to differentiate itself from other discount retailers like Wayfair, Walmart, and TJX Cos.' Home Goods [7][8] Consumer Perception - Analysts have noted that Big Lots may not always offer the best value for money, with many items available at lower prices from competitors [8] - The shopping experience has been criticized for being unsatisfactory due to a jumbled assortment of products, which detracts from consumer appeal compared to other discount retailers [9]