As inflation continues to hit the wallets and budgets of Americans, many retailers are being forced to either scale their business in a different direction.
Or, completely close altogether.
Unfortunately, beloved U.S. bargain retailer could be the latest casualty in the country’s battle with inflation.
FOX Business reported on Wednesday that up to 315 Big Lots’ locations could be on the chopping block and facing potential closure, citing a Securities & Exchange Commission filing from last Friday.
The company disclosed in the filing that it had upped the number of permitted store closings to a maximum of 315 as part of late July amendments to a credit agreement and term loan facility. That marked a 165-store increase from the 150 closings previously permitted.
Other changes made “certain additional reports” to its lenders required for Big Lots, trimmed the credit agreement’s aggregate commitments by $100 million to $800 million and made the borrowing interest rate 50 basis points higher, according to the filing.
Big Lots said it entered into the amendments “in connection to its previously disclosed intention to aggressively address underperforming stores.”
There are over 1,300 locations of the discount retailer nationwide.
“Big Lots continues to provide incredible value and remarkable discoveries for our customers as we execute a clear plan to build a stronger business. These efforts include taking decisive actions to operate efficiently and reviewing our store footprint on an ongoing basis to make sure we’re best positioned to serve our customers and our business,” a Big Lots spokesperson told FOX Business.
“While the majority of our stores are profitable, we have made the difficult decision to close certain underperforming stores. We are confident that the steps we are taking will best position the company for the future as we return to our roots, focus on owning the bargain space, and deliver unmistakable value to our customers.”
Big Lots had indicated earlier in the summer that this year had 35 to 40 closures and three openings expected. At the same time, it flagged “substantial doubt about the Company’s ability to continue” amid an inflation-related pullback in its shoppers’ spending, as previously reported by FOX Business.
“We remain focused on managing through the current economic cycle by controlling the controllables,” Big Lots CEO Bruce Thorn said in the first-quarter earnings release. “As we move forward we’re taking aggressive actions to drive positive comp sales growth in the latter part of the year and into 2025, and to maintain year-over-year gross margin rate improvements, all driven by progress on our five key actions.”
It has identified its “five key actions” as “to own bargains, to communicate unmistakable value, to increase store relevance, to win customers for life with our omnichannel efforts, and to drive productivity.”