One Of America's Biggest Discount Retailers Is Closing More Stores

October brought with it a new raft of bad news for shoppers of one of the country's largest discount retail chains: Big Lots. Hemorrhaging capital, Big Lots has secured $707.5 million in financing to keep (some of) the doors open, as it works to complete the sale of its assets and operations to a Los Angeles-based private equity firm, as reported by Reuters. (On September 9, Big Lots announced it had filed for bankruptcy protection.)

It appears shifting economic circumstances (read: the real reason our historically strong economy isn't benefiting you) have evaporated consumer interest in a number of the discretionary spending categories that underpin Big Lots' primary retail focus, including seasonal products that consumers often buy in larger quantities when they feel financially secure. Alex Bitter from Business Insider reported seeing deals that didn't feel like bargains and plenty of understocked or empty shelves when visiting a Big Lots in Maryland, potentially illuminating supply-chain issues among the laundry list of troubles plaguing the retailer. He also noted a rise in closures among brick-and-mortar locations across brands over the last 20 years, coinciding not so serendipitously with a notable uptick in e-commerce sales.

Big Lots (among other discount stores) has served as a key feature in shoppers' strategies to save money on important grocery items and other products for the home for years, so an announcement of new closures won't be welcome news for plenty of Americans. After Big Lots shuttered numerous distribution centers and other assets under the brand's control, this is more of the same news.

Interestingly, Big Lots once traded under numerous other brand names, including "Odd Lots," and commentators have noted that its scattershot approach to stocking shelves with all kinds of assorted clearance goods left it with a definitive lack of identity. Ultimately, the brand consolidated under the Big Lots banner and has moved toward greater consistency in its product offerings, a shift business minds might consider a positive, but one that hasn't resulted in customer growth. And, according to Modern Retail, it doesn't help that Big Lots faces stiff competition from other discount brands, like Target, Walmart, and T.J. Maxx.

Between 2021 and 2023, Big Lots reported sales losses for three years in a row, with each year's losses greater than the previous year's. In 2023, the company's net sales fell by 14%, according to RetailDrive. When assessing Big Lots' situation, Neil Saunders, managing director of GlobalData Retail, told Modern Retail, "This is a business that has suffered sales declines for a reasonable period of time. What you come to expect is that, as you go forward, those declines start to moderate a bit and then you start to go back into growth, but Big Lots shows no signs of that happening."

Indeed, the brand filed for bankruptcy in September, and it's poised for a buyout by Nexus Capital Management LP. The bankruptcy proceedings were initiated in an effort to clear the way for this sale while creating conditions to allow for a potential auction that takes the brand's value higher. Big Lots began telegraphing this move over the summer, posting "closing soon" signs on around 300 of its more than 1,400 store locations, then pushing back its quarterly earnings call.

Initially, almost 300 closures were announced, but this figure has jumped up, with 47 more stores added to the list. The Hill reported in September that another 250 locations are likely to get the ax by the middle of January 2025. So far, 344 Big Lots locations have been slated for closure, but this figure likely will increase substantially in the coming months.

With this said, for shoppers living in an area with a closing Big Lots, there's potential for gigantic savings on products in the store. In August, the retailer was advertising price cuts at 20% of the retail figure, looking to shift merchandise in the locations that were on their way out. These figures have risen to as much as 50%, however, adding significantly to the potential savings you might find on goods for the house.

With this updated list of stores seeing their futures cut short, only a few states served by Big Lots remain unaffected (including Rhode Island, West Virginia, and Nebraska). It's unclear what the store closures will mean in terms of total layoffs, but Big Lots has already shed hundreds of jobs, so it is fair to guess that plenty more will be looking for new work sometime in the near future. (Perhaps, though, it'll line up with the best time of year to look for a new job.)