RETAIL COLLAPSE ACCELERATES: Discount homeware chain Big Lots is closing 315 stores due to financial struggles and declining sales
A discount homewares store chain in the United States is shutting down 315 stores across multiple states due to growing financial woes, the beleaguered retailer revealed in a regulatory filing to the Securities and Exchange Commission (SEC).
Big Lots, which accounts for approximately 1,392 stores across the country, warned its financial regulators that its earnings have consistently fallen over the past 10 quarters. In June, it reported a net loss of $205 million in the quarter ending May 4, with its president and CEO Bruce Thorn stating that sales had taken a hit “due largely to a continued pullback in consumer spending, particularly in high ticket discretionary items.” The retailer’s sales also fell 10 percent to $1 billion in the first quarter. (Related: Discount homeware chain Big Lots warns of BANKRUPTCY filing, triggering fears of mass closures.)
In the filing, the Columbus, Ohio-based chain stated that it had used up most of its spare cash to cope with these losses. It also revealed that the company had already tried to cut costs, boost customer spending and get cheaper credit, but these steps were insufficient.
Initially, Big Lots had agreed with lenders to close 150 underperforming stores, in addition to the 40 store closures announced in June. However, the company has now decided to close a total of 315 stores to cut costs amid declining sales and rising expenses. This move will reduce Big Lots’ store count by roughly a quarter.
The company has pinpointed locations in Connecticut, Massachusetts, Michigan, New Hampshire and Vermont for closure. The chain has not released a comprehensive list of the stores slated for closure, but affected locations are marked with a “closing this location” banner on their website and a 20 percent off promotion.
“While the majority of our stores are profitable, we have made the difficult decision to close certain underperforming stores,” a company spokesperson told Retail Dive. “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.”
The retailer said it will support its “hard-working associates who are impacted by a closure, including by accepting requests to transfer to another Big Lots location, if they choose. “Workers unable to move to another store will be given severance,” the spokesperson added.
Brick-and-mortar stores close amid a retail apocalypse
This closure is part of a broader “retail apocalypse,” where brick-and-mortar stores grapple with rampant theft and increasingly tight margins.
In the first four months of 2024 alone, nearly 2,600 stores shut their doors and if this trend persists, the year could witness the closure of approximately 8,000 retail outlets. These closures reverberate across the industry, affecting businesses, from discount stores to major retail giants.
Walmart, a staple in American retail, has not been immune to the downturn. In recent months, the retail giant has closed three more underperforming locations. Best Buy, another major retailer, closed ten stores in March. Dollar stores, a fixture in American retail, have been hard hit too. In April, 99 Cents Only announced it would shutter all 371 locations across California, Texas, Arizona and Nevada. Additionally, Family Dollar and its sister company Dollar Tree are set to close 1,000 stores over the next three years.
Mall staples are also feeling the pinch.
Express, a popular clothing retailer, filed for bankruptcy in April and announced it would shut down 95 Express outlets with all its UpWest stores. Similarly, Rue21, a teen fashion chain with a significant presence in malls across America, revealed in May that it would close all 543 U.S. stores after going bankrupt.
The downturn has not spared specialty retailers either. Badcock Home Furniture & More announced at the end of July that it is closing all 380 stores scattered across the Southern United States after falling into bankruptcy earlier this year.
Check out Collapse.news for more stories about retail bankruptcies.
Watch this video that talks about the fast-casual restaurant chain MOD Pizza closing down more than 40 stores this year.
This video is from the Daily Videos channel on Brighteon.com.
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Sources include:
DailyMail.co.uk
BigLotsInc.gcs-web.com
CBSNews.com
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