Hello folks. It looks like Big Lots is the latest casualty in what’s becoming a full-blown retail apocalypse.
The once-popular discount home goods retailer is reportedly teetering on the edge of bankruptcy after years of declining sales and a brutal consumer pullback. According to Bloomberg, Big Lots could be seeking Chapter 11 protection within weeks if it can’t scrounge up some investors willing to take a risk on a sinking ship.
The Ohio-based company, which at one point operated around 1,400 stores across the U.S., has already been trimming the fat, closing hundreds of locations earlier this year. But it seems that might not be enough to keep the lights on. Big Lots’ stock took a nosedive, plummeting by as much as 50% Thursday morning to a measly $0.56 a share—a far cry from its former glory.
CEO Bruce Thorn has been waving the red flag for a while now, warning that Americans are tightening their belts, particularly when it comes to big-ticket items like furniture. This consumer shift has been hammering Big Lots’ sales, leading to a jaw-dropping $132 million loss in just the first quarter of 2024 alone. And with ten straight quarters of declining revenue, it’s clear the company is in serious trouble.
Big Lots has been scrambling to find additional financing after receiving a lifeline loan earlier this year, but with no official word from the company on its plans, things aren’t looking promising. The chain has already identified dozens of stores across states like Connecticut, Massachusetts, and Michigan that are on the chopping block. Some stores even have “closing this location” banners proudly displayed on their website, alongside a desperate-sounding 20% off promotion.
Despite the grim outlook, Big Lots is trying to put a positive spin on things. A spokesperson told Retail Dive that while most stores are still profitable, they’ve had to make the tough decision to close underperforming locations. The company is doubling down on its roots, focusing on “owning the bargain space” and delivering “unmistakable value” to its customers. But let’s be honest—when your stock is worth less than a cup of coffee, it’s hard to take that optimism seriously.
Even Big Lots’ store managers are feeling the pinch. Over on Reddit, they’ve been venting about the flood of unsold stock piling up in their warehouses. One manager lamented, “The warehouse is pretty much full to capacity and none of [it] is selling.” Another chimed in with, “Isn’t that the weirdest thing? So much stuff, but none of it is what people want.”
JUST IN: Big Lots is reportedly considering filing for chapter 11 bankruptcy 😢
Stock is down 27% in the pre-market… pic.twitter.com/WXfkWdZQ0x
— Triple Net Investor (@TripleNetInvest) August 29, 2024
Big Lots isn’t alone in its struggles. The retail sector is in the midst of a bloodbath, with nearly 2,600 store closures in the first four months of 2024 alone. If that pace keeps up, we could see close to 8,000 stores vanish by year’s end. Even big names like Walmart and Best Buy aren’t immune, each shuttering underperforming locations. Dollar stores, once seen as recession-proof, are also taking a hit, with 99 Cents Only and Family Dollar announcing massive closures.
So, what’s the takeaway here? The retail landscape is shifting, and not everyone is going to survive. Big Lots might be the latest to fall, but they certainly won’t be the last. As consumers continue to pinch pennies and tighten their wallets, only the strongest—and savviest—retailers will make it out of this apocalypse in one piece.
