With inflation continuing to rear its ugly head, many shoppers are increasingly reliant on discount stores. But even with their loyal band of bargain hunters, some stores just can't keep up. The latest chain to face these challenges is home goods retailer Big Lots, which just announced that it's closing more stores this year.
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In a June 13 filing with the U.S. Securities and Exchange Commission (SEC), Big Lots noted that it plans to shutter between 35 and 40 stores in 2024. Currently, the retailer operates 1,389 locations in 48 states, with the most in Texas (116 stores), California (109 stores), Florida (106 stores), North Carolina (75 stores), and New York (64 stores).
"In 2024, the U.S. economy has continued to face macroeconomic challenges including elevated inflation, which has adversely impacted the buying power of our customers," the SEC filing reads.
The company didn't share details on which locations will be closing, but it has been actively shuttering stores for some time now. In 2023, Big Lots closed roughly 50 stores and kicked off 2024 with more closures. Over the past few months, the retailer shuttered Big Lots stores in Leesburg, Virginia, and Columbia, Missouri.
In light of current projections and "net losses and use of cash in operating expenses" in 2022, 2023, and this year, Big Lots also noted that there is "substantial doubt" about its ability to continue. In the first quarter of 2024 alone, net sales decreased by 10.2 percent, or $114.5 million. The company also reported net losses of $205 million, or $6.99 per share, during the same time period.
"While we made substantial progress on improving our business operations in Q1, we missed our sales goals due largely to a continued pullback in consumer spending by our core customers, particularly in high ticket discretionary items," Bruce Thorn, president and CEO of Big Lots, said in a June 6 press release announcing the results.
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Big Lots is actively working to keep the business afloat, with store closures being just one of a few action items.
"Our operational initiatives to offer a larger assortment of new and exciting extreme bargains, cut costs, and increase productivity exceeded our targets in Q1. This enabled us to improve consumer perceptions about our brand and the value we offer, and to deliver a year-over-year improvement in gross margin and operating expenses, despite significant sales pressure," Thorn said. (He also cited the business's five key actions: "to own bargains, to communicate unmistakable value, to increase store relevance, to win customers for life with our omnichannel efforts, and to drive productivity.")
And even with the aforementioned "doubts" and external fears that Big Lots could end up filing for bankruptcy, Thorn expressed optimism for the remainder of 2024.
He added, "While near-term conditions have been challenging, we're not slowing down on making progress to transform our business. The current financial performance does not yet reflect the stronger business model that we've created through our five key actions, but we expect the fruits of those efforts to become more apparent in the back half of the year."
Best Life reached out to Big Lots for comment and will update the story when we hear back.
