NEW YORK — Big Lots is closing more than 300 locations across the United States, or roughly 4% of its stores, following an earlier warning that its future was in “substantial doubt” amid ongoing financial troubles.
The discount retailer previously said it planned to close as many as 40 stores during its most recent earnings report in June, when it recorded a 10% decrease in sales and a $205 million loss for the quarter because customers are cutting back on spending. In a recent regulatory filing, Big Lots said it would increase the number of closures to 315 stores, part of an updated loan agreement to secure its finances.
A specific list wasn’t revealed, but Big Lots is listing closing sales at hundreds of its 1,389 stores on its website.
People are also reading…
Big Lots is closing hundreds of stores across the US, including this location in Hallandale Beach, Florida.
Big Lots said in a statement Tuesday to CNN that it’s “taking decisive actions to operate efficiently and reviewing our store footprint on an ongoing basis to make sure we’re best positioned to serve our customers and our business.”
A company spokesperson said that although a “majority” of its stores are profitable, it’s making the “difficult decision to close certain underperforming stores.”
“We are confident that the steps we are taking will best position the company for the future as we return to our roots, focus on owning the bargain space, and deliver unmistakable value to our customers,” Big Lots said.
CEO Bruce Thorn said in a press release in June that the company “missed our sales goals due largely to a continued pullback in consumer spending by our core customers, particularly in high ticket discretionary items.”
The recent regulatory filing, however, was more dire about the state of the 57-year-old company’s health. The filing said that there’s a “significant likelihood” of a potential default on a 2022 loan and that the company has “substantial doubt” about the company’s ability to remain operational.
Customers cutting back their spending on non-essential items has hurt a number of retailers, even putting some out of business. Amazon and other online retailers have also hurt traditional brick-and-mortar stores.
Conn’s HomePlus, a 134-year-old furniture and electronics retailer, recently filed for bankruptcy and is in the process of closing all of its stores. Bob’s Stores and 99 Cents Only Stores also went out of business earlier this year.
Shares of Big Lots (BIG) are down nearly 90% for the year.
What does brand loyalty look like now? Why businesses are revamping their customer rewards programs
What does brand loyalty look like now? Why businesses are revamping their customer rewards programs
It is a tough time to be in the retail business. Inflation has taken its toll on consumers’ wallets in the past few years, and although prices are no longer rising as quickly as they did in 2022, they still are up by around 20% compared to the start of 2020.
These price increases have caused consumers to find more ways to save money. Discount stores were the hottest segment of the retail sector in 2023 and spending at discount retailers grew by 26%, according to Deloitte research. In contrast, spending at department stores fell by nearly 20%.
This, in turn, has put pressure on retailers, whose margins are already thin. Task Group analyzed survey data from Deloitte to see how retailers plan to face these challenges.
The Deloitte survey asked 50 senior executives from retail companies what they thought the biggest growth opportunities were for them in 2024. The most common response from the executives involved brand loyalty programs, such as those offering consumers points every time they make a purchase. Just over half of executives surveyed believed strengthening such programs would
