BIG TROUBLE
Major discount retailer confirms yet more store closures as it battles against financial ruin and permanent shutdown
The company cited elevated inflation as a reason for the financial issues
A POPULAR discount store with about 1,400 locations nationwide said it plans to close between 35 and 40 stores this year.
The announcement comes after Big Lots closed 52 stores in 2023.
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The Ohio-based company announced further closures in its June SEC filing.
Big Lots reported that "elevated inflation" has impacted consumers' buying power, resulting in sufficient financial losses.
"Our net losses and use of cash in operating activities in 2022, 2023, and the first quarter of 2024, as well as our current cash and liquidity projections, raise substantial doubt about our ability to continue," the report reads.
The company's net sales decreased by $114.5 million in the first quarter of 2023 compared to the same period in the previous year.
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When stores shuttered last year, president and CEO Bruce Thorn said the closures were part of a multi-year plan.
Big Lots announced in late 2023 that locations in New York, North Carolina, and Illinois would close.
"We review our store footprint on an ongoing basis to ensure we're best positioned to serve our customers and our business successfully," a spokesperson said.
Big Lots said the closures were "consistent with standard retail prices."
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Then, a store in Leesburg, Virginia, announced it was closing in April.
The location was at the Battlefield Shopping Center, 40 minutes northwest of Washington DC.
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AN INDUSTRY-WIDE ISSUE
Consumers are cutting back on spending on inflation keeps prices high.
Big Lots is just one of many retailers seeing the effects of a dip in consumer spending.
In April, The 99 Cents Only Store filed for bankruptcy and later announced plans to close all 371 locations nationwide.
The business cried rising inflation rates and an inability to keep a profit margin as the reason behind the closure.
After the closures were announced, rival Dollar Tree Inc. acquired the properties of nearly 170 bankrupt 99 Cents Only Stores.
Our net losses and use of cash in operating activities in 2022, 2023, and the first quarter of 2024, as well as our current cash and liquidity projections, raise substantial doubt about our ability to continue
Big Lots June SEC Filing
Dollar Tree has been facing financial issues of its own.
Its parent company, which also owns Family Dollar, has closed about 1,000 locations since 2023.
However, COO Michael Creedon said that acquiring 99 Cent Stores is an opportunity for profitable growth.
“The portfolio complements our existing footprint and will provide us access to high-quality real estate assets in premium retail centers, enabling us to rapidly grow the Dollar Tree brand across the western United States, reaching even more customers and communities,” he said, reports AP.
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