Big Lots to close 35 to 40 stores this year amid 'doubt' the company can survive
Why is Big Lots closing 35 to 40 stores this year?
Big Lots is closing 35 to 40 stores this year due to worsening financials and a tough consumer market1. The company has faced declining sales amid rising prices and a downturn in consumer spending, with sales dropping 10.2% between the first quarters of 2023 and 2024. Additionally, the company has substantial doubt about its ability to continue operation, leading to potential bankruptcy.
What financial challenges is Big Lots currently facing?
Big Lots is currently facing significant financial challenges, including net losses, substantial cash use in operating activities, revenue decrease, and gross margin compression since 2022. The company has expressed "substantial doubt" about its ability to continue operations, leading to potential bankruptcy speculations. These challenges are attributed to elevated inflation, reduced consumer spending, and increased prices.
How many stores did Big Lots operate at the start of 2024?
Big Lots operated 1,392 stores at the start of 2024. This number is down from 1,425 stores in the first quarter of 2023. The company plans to close 35 to 40 stores this year and open three new ones.