Big Lots files for bankruptcy, agrees to sale to Nexus Capital

(Bloomberg) — Discount retailer Big Lots Inc. has filed for bankruptcy protection and plans to sell the company’s assets and ongoing operations through a court-supervised proceeding.

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The Columbus, Ohio-based company said it has filed for Chapter 11 bankruptcy in Delaware, according to a statement from the company. It listed assets and liabilities of $1 billion to $10 billion in its filing with the court. Chapter 11 allows a company to continue operating while it works out a repayment plan for creditors.

Big Lots sought court protection after years of struggling with declining store sales and closures. It entered into a sale agreement with an affiliate of private equity firm Nexus Capital Management LP, the retailer’s announcement said. Under the agreement, Nexus will serve as a “stalking horse bidder,” meaning that if higher or better offers are not received from other parties, Nexus will buy the business.

Big Lots expects the transaction to close in the fourth quarter of 2024 if Nexus remains the winning bidder, the statement said.

The retailer has secured commitments for $707.5 million in financing in the form of a post-petition credit facility, the company said. As a result, Big Lots expects to have ample liquidity as it works to complete the sale transaction, it said.

Big Lots is among the struggling retailers that have been hit by a slowdown in consumer spending. Retailers Conn’s Inc. and LL Flooring Holdings Inc. have also filed for bankruptcy in recent months.

(Updates with details of the statement)

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