Big Lots has become the latest casualty of Retail-Apocalypse 2024 after filing for Chapter 11, which is like the "I'm not quite dead yet" of the retail world.
This has been a rough year for retailers, with 21 big-name companies filing for bankruptcy in just the first half of 2024. Red Lobster, for example, just escaped Chapter 11 by closing 100 restaurants.
Big Lots has been in trouble for some time, facing 16 consecutive quarters of sales declines. According to retail analyst Neil Saunders, customers have been ditching Big Lots in favor of stores like Walmart that offer far better value.
And when Big Lots delayed releasing their financial results last Friday … people knew what was coming.
Their CEO, Bruce Thorn, said that "the actions we are taking today will enable us to move forward with new owners who believe in our business and provide financial stability."
That's corporatese for "cutting stores and laying off staff to cut down its huge debt before hoping a private equity firm called Nexus Capital buys them out."
Last month, Big Lots announced they would be closing over 300 stores. Last week, their stock price fell by 50% to 56 cents on news of their potential bankruptcy, and stocks halved in premarket trading today to 26 cents.
That's far cheaper than anything in a Big Lots store.
Add that to their debt of $573 million, plus interest, things are not looking good.
Because, unlike the federal government, out-of-control debt comes with consequences in the business world!
Follow Ian on Substack or X (@ighaworth).
P.S. Now check out our latest video 👇
