Ohio-based Big Lots files for bankruptcy after store closings

According to Source, Big Lots, the discount retail chain based in central Ohio, has filed for bankruptcy and may soon be under new ownership following the closure of more than 300 stores earlier this summer. The company announced on Monday that it has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware. As part of the filing, Big Lots has entered into a sale agreement with private equity firm Nexus Capital, which will acquire all of the company’s assets and business operations.

In a press release, Big Lots’ president, Bruce Thorn, expressed optimism about the company’s future. “The actions we are taking today will allow us to move forward with new owners who believe in our business and provide financial stability. This will help us optimize our operational footprint, improve our performance, and deliver on our promise to be a leader in extreme value,” said Thorn.

As part of the bankruptcy process, Big Lots is continuing to evaluate its operational footprint, which includes plans for additional store closures. Thorn emphasized that while most of the company’s locations are profitable, the bankruptcy process will help the company further streamline its store network.

More Store Closures and Layoffs

Monday’s bankruptcy filing follows news from last week that Big Lots will close its west Columbus distribution center by the end of October, affecting nearly 400 workers. The company submitted a notice to the City of Columbus, though no reason was given for the closure of the facility at 300 Phillipi Road.

In late August, Big Lots launched aggressive promotions on Halloween costumes and decorations in an effort to stave off bankruptcy. The chain advertised significant discounts on Halloween merchandise, offering items for 50% to 70% off after purchasing a large closeout inventory from a national party supply retailer. Despite these efforts, bankruptcy speculation continued as store closures mounted.

Big Lots had initially announced in June that it would close 35 to 40 stores by the end of 2024. However, by July, 149 locations posted “closing” banners on their websites, signaling a rapid acceleration of closures. In its most recent filing with the Securities and Exchange Commission (SEC), Big Lots revealed plans to close as many as 315 stores.

Financial Struggles Amid Economic Pressures

Big Lots has faced significant financial challenges in recent years. The company’s sales dropped 10.2% between the first quarters of 2023 and 2024, resulting in a $114 million revenue loss. The company attributed this decline to ongoing macroeconomic challenges, including high inflation, which has reduced the purchasing power of its customers. Additionally, Big Lots incurred $72.2 million in debt during this period, bringing its total debt to $573.8 million.

In its SEC filings, the company expressed “substantial doubt about the company’s ability to continue,” leading to widespread speculation about an impending bankruptcy. These challenges have placed Big Lots in the same position as other major retailers and restaurants that have filed for bankruptcy since the COVID-19 pandemic.

Industry-Wide Struggles

Big Lots is not alone in its financial struggles. Red Lobster, for example, filed for bankruptcy earlier this year, citing $1 billion in debt, and subsequently closed several Ohio locations. Bed, Bath & Beyond also filed for bankruptcy last year, leading to multiple store closures in central Ohio.

Orlando-based restaurant chain Buca di Beppo filed for Chapter 11 bankruptcy protection on Sunday. The company reportedly owes between $15 million and $50 million to at least 30 creditors. Earlier this year, plans were finalized to demolish Buca di Beppo’s Worthington, Ohio, location after Chick-fil-A purchased the site in April.

Big Lots’ Ohio Presence

Despite its financial challenges, Big Lots has continued to experiment with new store formats. In Ohio, the company transformed a Delaware location into “Big Lots Home” last year, a store concept focused on furniture and décor. This rebranding effort extended to 10 other locations, including stores in Louisville and Georgetown, Kentucky.

As Big Lots navigates its bankruptcy and sale process, the company’s future remains uncertain, but new ownership and continued store optimization may offer a path to recovery.