Big Lots faces store closures amid economic downturn in 2024

NATION – Big Lots, the Ohio-based discount retailer with nearly 1,400 stores across the United States, is going through major changes due to serious financial problems in 2024. The company, once known for affordable home furnishings and discounted items, has been hit hard by a struggling U.S. housing market, high inflation, and changes in how people shop. This has led to many store closures and bankruptcy filings.
In September 2024, Big Lots filed for Chapter 11 bankruptcy protection, saying that falling sales and increasing debt were the main reasons. The slowdown in the housing market, with fewer people buying homes, has hurt businesses that sell home improvement and furnishings—areas where Big Lots operates heavily. High mortgage rates and ongoing inflation have also reduced how much people can spend, making the company’s financial situation worse. Since March 2021, Big Lots’ stock price has dropped by 98%, from around $72 to just over $1 per share. This huge drop shows that investors are worried about Big Lots’ ability to stay profitable in these tough times.
At first, Big Lots planned to close up to 315 stores in about thirty states because of falling sales and high inflation. However, the number of closures has grown, with reports showing that over 400 stores have closed in 2024 alone. In Mohave County, specific closures include the Bullhead City store at 2350 Miracle Mile, the Kingman store at 3320 N. Stockton Hills Road, and the Lake Havasu City store at 1795 Kiowa Avenue. These closures are part of the company’s urgent efforts to restructure and stabilize its business amid ongoing financial troubles.
Mohave County, Arizona, known for its lively communities and growing population, has been greatly affected by Big Lots’ store closures. The closure of the Bullhead City store at 2350 Miracle Mile impacts about 45 employees, many of whom have worked there for over ten years. Local residents have depended on this store not only for affordable home goods but also as a convenient place for everyday shopping. A local employee shared, “A lot of companies don’t give their employees much notice, if they do they’re worried the workers will quit before they’re officially closed.”
The Kingman store at 3320 N. Stockton Hills Road was an important part of the local economy, bringing in an estimated $5 million each year and supporting many local suppliers and vendors. Its closure is expected to affect not just employees but also other businesses that benefited from the store’s presence. To help those affected, local nonprofits like the Mohave County Workforce Development Board are offering support and retraining programs for former employees. “We are committed to helping these individuals transition to new jobs,” said Maria Lopez, Director of Workforce Development.
Big Lots initially tried to save the company by selling its business to Nexus Capital Management LP during the bankruptcy process. However, the deal didn’t work out because Nexus needed more financing and cost savings. After that, Big Lots made a deal with Gordon Brothers Retail Partners, a Boston-based firm, to save at least 200 stores and possibly keep up to 400 stores open. This $496 million deal includes paying off debts and aims to save thousands of jobs across the country. Under the agreement, Variety Wholesalers, Inc., which owns over 400 discount stores in the Mid-Atlantic and Southeastern regions, will buy 200 to 400 Big Lots stores. These stores will keep the Big Lots name, and some current employees may stay at these locations and the one or two distribution centers being bought.
The many store closures have deeply affected employees and local communities. Across the nation, thousands of employees are facing job losses, and communities are losing access to affordable home goods and furnishings that Big Lots provided. Employees are worried and sad about the upcoming closures. An internal email from Big Lots CEO Bruce Thorn talked about the company’s efforts to save jobs and thanked employees for their hard work during these tough times. But many workers still face layoffs and may receive WARN Act notices, which are alerts about upcoming job cuts. One employee in Lake Havasu City said, “We don’t know when our last day will be, just be kind, courteous and respectful as it is the holiday season and we still have business to conduct. Thank you for your patience and support.”
The deal with Gordon Brothers and the possible transfer of stores to Variety Wholesalers are strategic moves to stabilize Big Lots’ operations and adapt to the changing retail market. The company is focusing on changing its product offerings, improving financial stability, and adding digital shopping options to meet the growing demand for online and mixed online and in-store shopping. In November 2024, Big Lots launched a new mobile app to better engage customers and make shopping easier by combining in-store and online purchases. This move shows the company’s effort to modernize and stay competitive in a more digital market.
Big Lots’ problems reflect the bigger issues that traditional brick-and-mortar retailers face in the age of online shopping. As more people shop online and economic pressures continue, many retailers find it hard to keep their market positions without significant changes and innovations. Industry experts like Sudip Mazumder, Senior Vice President at Publicis Sapient, have noted that Big Lots’ focus on closeout merchandise has become less attractive as consumers look for more convenience, variety, and unique products. The rise of e-commerce and changing shopping habits have left many traditional retailers struggling to keep up.
– Jeremy Webb