Big Lots has received some good news, possibly saving hundreds of stores from closing.
The company received approval from U.S. Bankruptcy Judge Kate Stickles on Tuesday for a last-minute sale that will keep 200 to 400 stores operating under new ownership. Judge Stickles approved the deal during a court hearing in Wilmington, Delaware, stating that it was the best option after a prior sale agreement fell through.
In September, Big Lots filed for bankruptcy, initially seeking to sell to private equity firm Nexus Capital. However, that deal collapsed earlier this month, prompting the company to begin liquidation sales at its 900 remaining stores. After Christmas, the retailer arranged a backup plan, partnering with Gordon Brothers Retail Partners to sell its stores, distribution centers, and intellectual property. As part of this deal, Variety Wholesalers, a privately owned retailer, agreed to purchase 200 to 400 stores. This sale is expected to preserve 5,000 to 10,000 jobs and maintain the Big Lots brand.
However, the sale would not provide enough funds to fully repay Big Lots’ vendors, including mattress makers Tempur Sealy and Serta Simmons, who continued supplying goods after the bankruptcy filing. Many vendors objected, arguing that Gordon Brothers should not take Big Lots’ assets without paying these debts. Serta’s attorney, Beth Rogers, noted that Big Lots accumulated $250 million in new debts by ordering inventory it could not afford, likely leaving those debts unpaid under the new agreement.
At the time of its bankruptcy filing, Big Lots was the fourth-largest home goods retailer in the U.S., with over 1,300 stores and $4.7 billion in 2023 revenue. In recent days, the company has been advertising store closing sales. However, that may soon come to an end with this latest update.
