Columbus, Ohio — Big Lots, Inc. has entered into an agreement with an affiliate of Nexus Capital Management LP, pursuant to which Nexus has agreed to acquire substantially all of the company’s assets and ongoing business operations. To facilitate the transaction, the company, together with each of its subsidiaries, initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware. During and after this process, Big Lots will continue to serve customers at their nearest store location or online at www.biglots.com.
As part of the court-supervised sale process, the company is continuing to assess its operational footprint, which will include closing additional store locations. The company will also continue to evaluate and optimize its distribution center model.
“Though the majority of our store locations are profitable, we intend to move forward with a more focused footprint to ensure that we operate efficiently and are best positioned to serve our customers. To accomplish this, we intend to use the tools afforded by this process to continue optimizing our store fleet in an orderly manner,” says Bruce Thorn, president and chief executive officer. “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.
“As we move through this process, we remain committed to offering extreme bargains, enabling easy shopping in our stores and online and providing an outstanding customer experience,” Thorn continues. “We are grateful for the hard work and dedication of our associates who remain focused on delivering the best service possible for our valued customers, and we deeply appreciate the partnership of our vendors as we start a new chapter for our business.”
Adds Evan Glucoft, managing director of Nexus: “We are excited to have the opportunity to partner with Big Lots and help return this iconic brand to its status as America’s leading extreme value retailer. The Big Lots business has incredible potential and we are confident that its greatest days are ahead.”
Since the pandemic, Big Lots has taken steps to accelerate its strategic initiatives focused on improving sales and boosting its long term performance and profitability. Like many other retail businesses, the company says it has been “adversely affected by recent macroeconomic factors such as high inflation and interest rates that are beyond its control.” The prevailing economic trends have been particularly challenging to Big Lots, as its core customers curbed their discretionary spending on the home and seasonal product categories that represent a significant portion of the company’s revenue.
While the company’s underlying performance has been improving, the board of directors conducted a broad strategic review of alternatives and determined that entering into the sale agreement with Nexus, and initiating a court-supervised sale process, is the best path forward to maximize value and ensure continued operations.
Under the terms of the sale agreement, Nexus will serve as the “stalking horse bidder” in a court-supervised auction process pursuant to section 363 of the U.S. Bankruptcy Code. If Nexus is deemed the winning bidder, the parties anticipate closing the transaction during the fourth quarter of 2024.
Davis Polk & Wardwell LLP is serving as legal counsel; Guggenheim Securities, LLC is serving as financial advisor; AlixPartners LLP is serving as restructuring advisor; and A&G Real Estate Partners is serving as real estate advisor to the company. Kirkland & Ellis is serving as legal counsel to Nexus.
Big Lots is one of the nation’s largest closeout retailers focused on extreme value. For more information, visit www.biglots.com.
SOURCE: Big Lots, Inc.