A national discount home goods chain with nearly 1,400 stores is the latest to warn of money problems.
Big Lots has told financial regulators it may not be able to continue as a “going concern,” raising the risk of store closures and bankruptcy.
The Columbus, Ohio-based chain has seen its revenue decline steadily for each of the past ten quarters. And it lost a staggering $132 million in the first three months of 2024.
Store managers are not surprised, but they complain that bosses at company headquarters send out truckloads of products that customers don’t want.
In a recent regulatory filing, Big Lots said losses so far this year, plus further losses in 2022 and 2023, meant it had used up most of its spare cash. Retailers need money in the bank to cover the cost of inventory.
Big Lots has 1,389 stores in 48 U.S. states.
Big Lots executives said the retailer “expects to experience further operating losses and expects to have difficulty continuing to comply” with credit agreements later this year.
Big Lots has tried to cut costs, increase customer spending and get cheaper credit, but that may not be enough, the company said in the presentation to the Securities and Exchange Commission.
All of this “raises substantial doubt about the company’s ability to continue as a going concern,” the retailer said.
On Wednesday, before the market closed for the holiday, shares were trading at $1.71, down 48 percent from a month ago and 81 percent this year.
It had peaked at $72.31 during a post-pandemic rally in 2021.
Last year, Big Lots closed 52 stores. So far this year, it has closed 13.
Big Lots and other discount retailers are struggling in the United States. They are even more exposed to American spending cuts than stores that attract middle-class shoppers.
Lower-income customers have been cutting back on spending after two and a half years of sharp price increases.
In February, Big Lots began seeking new financing, according to Bloomberg News.
On Reddit, Big Lots store managers have complained that they are receiving more and more products that customers don’t buy.
“In the last month we received four of the largest trucks we’ve seen all year and triple the amount we normally receive,” one wrote on Tuesday of this week.
‘The warehouse is practically full and nothing is being sold.’
Another posted: “Isn’t that the weirdest thing? There are so many things, but none of them are what people want.”
“Maybe instead of wasting our budget on cheap junk that nobody wants, corporations will look at what’s popular and only buy that.”
The troubles for Big Lots come amid a widespread “retail apocalypse” that sees brick-and-mortar stores scrambling to combat rampant theft and increasingly tight margins.
Nearly 2,600 store closures have occurred so far in 2024.
In recent weeks, Walmart has closed three more underperforming locations, while Rite Aid said it will close another 27 pharmacies.
Dollar stores have also been hit hard: 99 Cents Only announced in April that it would close all 371 of its stores in California, Texas, Arizona and Nevada.
Big Lots is known for its discounted items.
Bob’s Stores and its sister store Eastern Mountain Sports closed ten stores in June. This is a previous closing at 499 Sunrise Highway in Patchogue, New York, in 2019
Similarly, 1,000 Family Dollars and Dollar Trees will close permanently in the coming years.
And last week it was revealed that Pinto Ranch, an iconic Texas store beloved by Drake, It closed abruptly after two decades.
Bob’s Stores, which sells sports and casual apparel in six states, said it will close all of its stores.
But it will clear out stock first with 70 percent off offers.
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