Ohio-based Big Lots files for bankruptcy after store closings

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COLUMBUS, Ohio (WCMH) -- Big Lots, the discount retail chain headquartered in central Ohio, has filed for bankruptcy and could soon be under new ownership after shuttering more than 300 stores earlier this summer.

The chain announced on Monday it has filed for Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware. As part of the court filing, the chain has entered into a sale agreement with private equity firm Nexus Capital, who will acquire all the company's assets and business operations.

"The actions we are taking today will enable us to move forward with new owners who believe in our business and provide financial stability, while we optimize our operational footprint, accelerate improvement in our performance, and deliver on our promise to be the leader in extreme value," said Bruce Thorn, president of Big Lots, in a release.

Big Lots said, as part of the court-supervised sale process, the company is "continuing to assess its operational footprint," which will include closing additional stores. Thorn boasted that while a majority of locations are profitable, the company intends "to use the tools afforded by this process to continue optimizing our store fleet in an orderly manner."

Monday's announcement comes after the chain announced last week it will close its distribution center in west Columbus by the end of October, leaving nearly 400 people without jobs. The company had filed a notice to the City of Columbus earlier in the week, which did not provide a reason for closing the center at 300 Phillipi Road.

Late last month, Big Lots was aiming to fight off bankruptcy by offering big discounts on Halloween costumes and decorations. The chain bought its "biggest extreme bargain Halloween closeout ever" from a "well-known national party supply retailer's overstock" that was originally valued at $11 million. The deal includes hundreds of new Halloween items that will be sold for 50 to 70% less than their original prices.

Big Lots had announced in early August it is shuttering several Ohio stores, among more than 300 locations that are closing amid speculation the company will file for bankruptcy. While Big Lots initially shared plans in June to shutter 35 to 40 stores by the end of 2024, the number of closures ballooned in July as 149 locations posted banners on their websites that read "closing this location." Since then, the chain has submitted an updated filing with the Securities and Exchange Commission that states the company expects to close up to 315 stores.

Big Lots' sales dropped 10.2% between the first quarters of 2023 and 2024, equating to a loss of about $114 million. The retailer, whose headquarters are in the 4900 block of East Dublin Granville Road, wrote in an SEC filing that, "in 2024, the U.S. economy has continued to face macroeconomic challenges including elevated inflation, which has adversely impacted the buying power of our customers."

The chain fell an additional $72.2 million into debt between the first quarters of 2023 and 2024, bringing the company's total debt to $573.8 million. In an SEC filing, the company said that it now has "substantial doubt about the company's ability to continue," leading to speculation of a potential bankruptcy filing.

Big Lots is now joining a sea of other stores and restaurants that have filed for bankruptcy since the COVID-19 pandemic. Red Lobster is closing a chunk of Ohio locations after filing for bankruptcy in May, citing $1 billion in debt. Bed, Bath & Beyond filed for bankruptcy last year, shuttering a number of central Ohio stores.

Orlando-based Buca di Beppo filed for Chapter 11 on Sunday as the company said it owes at least $15 million to $50 million to at least 30 creditors, court documents show. Plans were finalized earlier this year to bulldoze the chain's Worthington restaurant at 60 E. Wilson Bridge after the site was purchased by Chick-fil-A in April.

Big Lots' Ohio stores include a Delaware location that was transformed last year into "Big Lots Home," a new brand of stores dedicated to furniture and décor. The location was one of 10 Big Lots that underwent the rebranding, including stores in Louisville and Georgetown, Kentucky.