Big Lots raises funds with sale/leaseback agreements for DCs

Big Lots Inc. has entered into sale and leaseback agreements on its four company-owned distribution centers.

The discounter entered into the agreement with affiliates of Oak Street Real Estate Capital. The centers are located in Columbus, Ohio; Durant, Oak.; Montgomery, Ala.; and Tremont, Pa. Big Lots expects to receive estimated net proceeds of approximately $550 million.  

The company said it intends to use the net proceeds from the transactions to fully pay down debt on its revolving credit facility, provide additional liquidity and, when market conditions normalize, for other corporate purposes including investments in growth initiatives and potential share repurchases.

The transactions are expected to close in the retailer’s fiscal second quarter.

“Our board and management team regularly evaluate ways to optimize our balance sheet while maintaining a conservative capital structure,” said Big Lots president and CEO Bruce Thorn. “The transactions will provide the company with significant additional liquidity to navigate the current uncertain environment. In addition, when we return to more normal conditions, it will enhance the company's ability to take other measures to drive shareholder value.”

Big Lots operates 1,405 stores in 47 states.