Big Lots is preparing to file for bankruptcy with plans to sell stores, Bloomberg News reports

(Reuters) – Discount home goods retailer Big Lots is preparing to file for bankruptcy as early as Sunday and plans to sell its chain stores through a court-supervised process, Bloomberg News reported on Friday, citing people familiar with the situation.

The company will remain in business under Chapter 11 protection, the report said, and is currently in the process of obtaining a stalking horse offer, meaning the offer could be outbid if better offers come along.

Earlier in the day, the retailer announced the postponement of its second-quarter earnings release, which had been scheduled for September 6. The company now expects to report results on September 12.

The company worked with advisers from AlixPartners and Guggenheim Partners in the bankruptcy and sale process, according to the report.

Big Lots, a retailer that operates about 1,400 stores and employs more than 30,000 people, has faced declining sales in recent quarters, putting pressure on its balance sheet.

Its shares have fallen more than 90% in the past year and were down more than 22% in extended trading on Friday.

Last week, Bloomberg reported that Big Lots is considering a possible bankruptcy filing and could seek court protection in the coming weeks.

The company did not immediately respond to a Reuters request for comment.

(Reporting by Savyata Mishra in Bengaluru; Editing by Mohammed Safi Shamsi)