Big Lots is considering bankruptcy filing after sales slump
(Bloomberg) — Off-price home goods retailer Big Lots Inc. (BIG) is contemplating a potential bankruptcy filing after years of sales declines, according to people with knowledge of the plans.
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The company is also seeking investors in a bid to avoid Chapter 11, according to one person familiar. The people asked not to be named sharing information about confidential matters. The plans aren’t final and Big Lots’ path may change.
Big Lots shares slumped 30% in after-market trading in New York.
Columbus, Ohio-based Big Lots runs about 1,400 stores throughout the US. It has been advised in its recent turnaround attempts by Alixpartners LLP, Bloomberg previously reported.
Representatives for Big Lots didn’t respond to requests for comment on the company’s plans, and a spokesperson for Alixpartners declined to comment.
Big Lots received a loan earlier this year to help it navigate its liquidity crunch. It has been seeking additional financing in recent weeks.
The chain on Aug. 12 approved one-time retention bonuses for its top executives totaling over $5 million. Such payments often precede corporate restructurings, especially in Chapter 11, and serve to keep key management from jumping ship during the effort.
Big Lots is among troubled retailers that have been hurt by a slowdown in home spending. Furniture retailer Conn’s Inc. filed for bankruptcy in July, while LL Flooring Holdings Inc., formerly known as Lumber Liquidators, filed this month.
(Updates to add share decline in after-market trading and detail about bonuses in seventh paragraph.)
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