Big Lots approved for last-minute sale of 200 to 400 stores (updated)

Former BL Stores

01/01/2025 24:14

* 
      Court approves sale as best option
    

        * 
      Variety Wholesalers to take over at least 200 Big Lots
stores
    

        * 
      Previous deal with Nexus Capital fell apart earlier in
December
    

  
 (Adds details from court throughout, byline)
    By Dietrich Knauth
       NEW YORK, Dec 31 (Reuters) - Retailer Big Lots on
Tuesday received a bankruptcy judge's approval for a last-minute
sale that would allow 200 to 400 stores to remain open under new
ownership. 
    U.S. Bankruptcy Judge Kate Stickles approved the sale at a
court hearing in Wilmington, Delaware, saying that the deal was
the best option for Big Lots after a previous sale agreement
fell apart.
    Big Lots filed for bankruptcy protection in September,
seeking to sell its business to private equity firm Nexus
Capital. But that deal fell apart earlier this month, causing
Big Lots to begin going out of business sales at roughly 900
remaining stores in preparation for a possible shutdown of the
company. 
    Big Lots lined up a backup deal just after the Christmas
holiday, saying it intended to partner with investment firm
Gordon Brothers Retail Partners to sell its stores, distribution
centers and intellectual property. Privately owned retailer
Variety Wholesalers agreed to acquire 200 to 400 Big Lots stores
as part of that deal.
    The sale would preserve 5,000 to 10,000 jobs, and keep the
company's brand alive, according to Big Lots. 
    But the scaled-back transaction would not provide enough
money to fully repay Big Lots vendors, like mattress makers
Tempur Sealy and Serta Simmons, that had continued to sell goods
to Big Lots after it filed for bankruptcy.
    Many of those vendors objected to the sale, saying that
Gordon Brothers should not be allowed to take Big Lots' assets
if it could not pay the company's vendors. 
    Beth Rogers, an attorney for Serta, said on Tuesday that Big
Lots continued to order furniture and other inventory even after
realizing it would not have the funds to pay for them, racking
up $250 million in new debts that will likely go unpaid under
the revised sale agreement.
    Big Lots was the fourth-largest home goods retailer in the
U.S. when it filed for bankruptcy, with 1,300 stores, $4.7
billion in 2023 revenue, and over 27,000 employees. The company
has been grappling with declining sales over the past few
quarters, putting pressure on a balance sheet that already
included $556.1 million in debt, according to court documents.

 (Reporting by Dietrich Knauth; Editing by Richard Chang)
 ((Dietrich.Knauth@thomsonreuters.com))