Big Lots prepares for 'going out of business' sales at all stores as deal falls apart
Big Lots is almost out of options now that its white knight has left the table.
The off-price retailer said it does not anticipate completing its previously announced sale to Nexus Capital Management, “though it continues to work toward completing an alternative going concern transaction with Nexus or another party” with a goal to complete a sale by early January. In September, Big Lots filed for bankruptcy protection as part of a deal to be acquired for about $760 million by private equity firm Nexus Capital.
Parallel with its efforts, Big Lots said it is preparing to start "going out of business" sales at all of its remaining store locations in the coming days. The retailer, which has closed hundreds of stores since September, currently operates approximately 950 locations.
Big Lots said it doesn’t believe that the sales will not preclude it from being sold in a going concern transaction.
"We all have worked extremely hard and have taken every step to complete a going concern sale,” said president and CEO Bruce Thorn. “While we remain hopeful that we can close an alternative going concern transaction, in order to protect the value of the Big Lots estate, we have made the difficult decision to begin the GOB process."
The retailer did not say how long its going out of business sales would last.
Big Lots has struggled in recent years with declining sales, listed assets and liabilities of $1 billion to $10 billion in its bankruptcy petition. The company is continuing to serve customers in-store and online, and will provide updates as available.
Davis Polk & Wardwell LLP is serving as legal counsel, Guggenheim Securities, LLC is serving as financial advisor, AlixPartners LLP is serving as restructuring advisor, and A&G Real Estate Partners is serving as real estate advisor to the company.