Big Lots files for bankruptcy, announces plans for sale to L.A. investment group

Sept. 9 (UPI) -- Discount department store chain Big Lots entered into Chapter 11 bankruptcy protection on Monday and announced a sales agreement to Los Angeles-based investment group Nexus Capital Management.

In a statement, Big Lots said filing for voluntary bankruptcy in the District of Delaware was necessary to facilitate the sale of the company and its subsidiaries. Big Lots said it will be closing some stores as part of the deal they did not specify how many and when they may be closing.

"As part of the court-supervised sale process, the company is continuing to assess its operational footprint, which will include closing additional store locations," Big Lots said. "The company will also continue to evaluate and optimize its distribution center model."

Last month, Big Lots announced that it would close from 35 to 40 stores around the country by the end of the year.

Big Lots President and CEO Bruce Thorn said in a statement said the sale and bankruptcy will allow it to some room to make several changes.

"The actions we are taking today will enable us to move forward with new owners who believe in our business and provide financial stability, while we optimize our operational footprint, accelerate improvement in our performance and deliver on our promise to be the leader in extreme value," Thorn said.

Big Lots said the headwinds of high inflation and high interest rates after the COVID-19 pandemic were too much for the company to withstand without some kind of structural financial change.

"We are excited to have the opportunity to partner with Big Lots and help return this iconic brand to its status as America's leading extreme value retailer," said Nexus Managing Director Evan Glucoft. "The Big Lots business has incredible potential and we are confident that its greatest days are ahead."