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Big Lots Strikes Deal to Save Hundreds of Stores, Avoid Brand Closure
Team Finance Saathi
28/Dec/2024
What's Covered in the Article:
- Big Lots has reached an agreement with Gordon Brothers and Variety Wholesalers to save its stores.
- The deal will prevent the closure of all Big Lots locations, saving jobs and the brand.
- The transaction requires approval from a bankruptcy judge and aims to rescue hundreds of locations.
In a significant development for Big Lots Inc., the bankrupt retailer has struck a deal to save hundreds of its stores, preventing the complete shutdown of the chain. This agreement follows the collapse of an earlier sale to Nexus Capital Management LP, which had fallen apart due to a lower-than-expected inventory appraisal.
The Deal with Gordon Brothers and Variety Wholesalers
The new deal involves a transaction with Gordon Brothers Retail Partners LLC, which will facilitate the transfer of Big Lots' brand, stores, and distribution centers to other operators. This arrangement has secured the future of Big Lots, averting a total closure after the failed sale to Nexus.
As part of the deal, Variety Wholesalers Inc., a discount chain operator in the Southeast and mid-Atlantic regions, intends to acquire between 200 and 400 Big Lots locations. Variety Wholesalers plans to continue operating these stores under the Big Lots name, potentially retaining many of the current staff at both the stores and distribution centers, as well as certain corporate associates.
Bankruptcy Court Approval
The transaction is still subject to certain closing conditions and requires approval from a bankruptcy judge. Big Lots is scheduled to appear in Delaware bankruptcy court on Monday to discuss the deal further. This agreement comes after Big Lots, which filed for Chapter 11 bankruptcy in September 2024, had announced it would begin liquidation sales at around 870 locations. The company had been facing significant challenges in securing a viable buyer until this agreement with Gordon Brothers and Variety Wholesalers emerged.
Rescue and Reassurance for Employees
In a statement, Bruce Thorn, President and CEO of Big Lots, emphasized that the deal with Gordon Brothers and Variety Wholesalers was the best opportunity to preserve jobs, maximize asset value, and continue operating the Big Lots brand. Big Lots had employed more than 27,000 workers at over 1,300 locations prior to filing for bankruptcy.
Looking Ahead
The bankruptcy proceedings are ongoing, but this deal offers a ray of hope for both the company and its employees, with the possibility of saving a significant portion of its retail presence. With this agreement, Big Lots now has a clear path to avoid the fate of total closure, keeping its stores open and its brand intact.