Dive Brief:
- Big Lots announced Friday a transaction that could leave up to 400 of its stores open after an earlier announcement that all stores would close. The company had more than 1,300 stores when it filed for bankruptcy in September. The deal also includes the possibility of retaining store associates at acquired locations and some corporate staff to support operations, according to a company press release.
- The sale to Gordon Brothers Retail Partners enables the transfer of Big Lots assets like intellectual property and real estate to other companies. Variety Wholesalers, which owns more than 400 stores including the Roses and Bargain Town banners, said it intends to buy between 200 and 400 Big Lots stores and up to two distribution centers and operate them under the Big Lots banner.
- The agreement is subject to approval by the bankruptcy court and “other customary closing conditions,” the companies said.
Dive Insight:
Following a failed deal to sell itself to Nexus Capital Management, Big Lots announced store closures and initiated going-out-of-business sales in a move the company said would help protect the value of its assets. Big Lots said at the time that it was determined to complete a sale by early January — either to Nexus or another entity.
"The strategic sale to Gordon Brothers and the transfer to Variety Wholesalers is a favorable and significant achievement for Big Lots that reflects the tireless work and collective effort of our team,” Bruce Thorn, Big Lots' president and CEO, said in a release. “This sale agreement and transfer present the strongest opportunity to preserve jobs, maximize value for the estate and ensure continuity of the Big Lots brand."
Big Lots filed for bankruptcy protection in early September after several failed moves to stabilize the business, including leasebacks and store closures. The trouble came when the company shifted its strategy away from closeouts and extreme bargains, resulting in higher average product prices, lower customer traffic and stalled sales volume.
"We are excited to partner with Gordon Brothers to provide a path forward for the Big Lots brand and hundreds of its stores. We look forward to working with members of the Big Lots team to realize the exciting opportunities ahead," Lisa Seigies, Variety Wholesalers' president and CEO, said in a statement.
As of Monday, Big Lots' homepage reflects that all stores are closing with a discount of up to 25% off the entire store. Last week, the company advertised a discount of up to 50%.
