Big Lots, a discount retailer based in Ohio, has filed for bankruptcy, prompting the closure of additional stores under new management, as stated by the company on Monday.

In a filing with the Securities and Exchange Commission in July, the retailer indicated plans to close between 35 to 40 stores; this number increased to 315 in a subsequent filing in August.

These closures are linked to a sale agreement with Nexus Capital Management LP, as reported by Big Lots in a Monday news release. Additionally, the company is undergoing Chapter 11 bankruptcy proceedings in the U.S. Bankruptcy Court for the District of Delaware.

By shutting down more stores, Big Lots aims to establish a “more focused footprint” and improve operational efficiency, according to Bruce Thorn, the company’s president and CEO, in the news release. The retailer will also refine its distribution center strategy.

“While most of our stores are profitable, our goal is to streamline our operations to enhance efficiency and better serve our customers,” Thorn noted in the release. “We will use the opportunities provided by this process to optimize our store network methodically.”

Since the COVID-19 pandemic, Big Lots has focused on enhancing its sales and profitability. The company cited challenges such as rising inflation and interest rates, indicating that these factors have impacted its operations, making normal business practices more challenging.

According to Big Lots, consumers have been more careful with their spending on home goods and seasonal items, which account for a large part of the company’s revenue.

“Although our underlying performance has been steadily improving, the Board evaluated various strategic options and concluded that the Sale Agreement with Nexus, along with a court-supervised sale process, represents the best way to maximize value and secure ongoing operations,” Big Lots explained in the release.

Last Friday, Big Lots postponed the release of its second quarter earnings report to Thursday, Sept. 12. However, the CEO shared on Monday that the company has “reached underlying comp sales, gross margin, and operating expenses as per our guidance.”

Thorn also mentioned that the third quarter is “starting off positively” and that the company expects an increase in momentum during the latter part of the year.

Recent deal for Big Lots involves over $700 million in financing

Big Lots disclosed in its Monday announcement that Nexus will serve as a “stalking horse bidder” in a court-supervised auction. Other companies can place higher bids; if Nexus succeeds, the sale is anticipated to finalize by the fourth quarter of 2024.

The company has also secured financing totaling $707.5 million, which includes $35 million from some of its existing lenders.

As part of its ongoing operations, Big Lots has filed motions for court approval to continue compensating employees and providing benefits, as well as payments to select critical vendors as part of regular business operations.

Contributing: James Powel

Saleen Martin is a reporter on YSL News’s NOW team. Hailing from Norfolk, Virginia – the 757. You can follow her on Twitter at @SaleenMartin