Big Lots signs sale agreement with Nexus, initiating Chapter 11 process

Ohio-based US retailer Big Lots has signed an agreement with an affiliate of Nexus Capital Management, under which Nexus will acquire all of the retailer’s assets and ongoing business operations.

Big Lots, together with its subsidiaries, voluntarily initiated a Chapter 11 proceeding in the U.S. Bankruptcy Court for the District of Delaware to facilitate the sale process.

The company aims to continue serving customers in-store and online during the transition.

Big Lots President and CEO Bruce Thorn said, “We’re proud of the work we do every day at Big Lots to provide our customers with unmistakable value and exceptional savings, and to build stronger communities through our philanthropic efforts.

“The actions we are taking today will allow us to move forward with new owners who believe in our business and provide financial stability as we optimize our operational footprint, accelerate our performance improvement and deliver on our promise to be a leader in the extreme.” value.”

Big Lots is currently evaluating its operational footprint, which may involve closing other stores.

The retailer will continue to evaluate and optimize its distribution center model.

Nexus will act as a “stalking horse bidder” in a court-supervised auction, with the transaction expected to close in the fourth quarter of 2024, subject to court approval and other conditions.

The proposed deal will close in the fourth quarter of fiscal 2024, if Nexus is successful during the bidding process.

Big Lots secured $707.5 million in financing, including $35 million in new financing from existing lenders, to support operations during the sale process.

The company also filed requests for court approval to continue paying employee wages and benefits and making payments to critical suppliers.

Big Lots has been working on strategic initiatives to improve sales and profitability but, like many others, has faced challenges due to macroeconomic factors such as high inflation and interest rates.

These conditions particularly affected Big Lots as discretionary spending on home and seasonal products declined among its core customers.

Davis Polk & Wardwell acted as legal counsel and Guggenheim Securities served as financial advisor to the retailer during the transaction process.

In February 2024, Big Lots completed a deal to acquire the entire inventory of the Hearthsong brand of children’s toys.

“Big Lots Signs Sale Agreement With Nexus, Initiates Chapter 11 Process” was created and originally published by Retail Insight Network, a brand owned by GlobalData.

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