Big Lots Struggles with Store Closures but Secures a Future with Gordon Brothers Deal
Discount retailer Big Lots has entered into a deal with investment and merchant banking firm, Gordon Brothers, to help navigate its current financial challenges and strategically position the company for future success. With a career at stake, Big Lots recently announced plans to close some of its underperforming stores, but this deal will ensure that at least 400 locations remain open. The deal with Gordon Brothers will involve the company selling off excess inventory and maximizing cash flow to breathe new life into Big Lots’ business model.
Big Lots’ decision to close some of its stores is a result of the changing retail landscape, as customers are increasingly turning to online shopping. In its recent earnings call, the company reported that its net sales have decreased by 10.7% from the same quarter in the previous fiscal year, and same-store sales declined 11.3%. This decline in sales has impacted the retailer’s profits and forced them to reevaluate their business strategy to improve the balance sheet and generate stronger operating cash flows.
Gordon Brothers, with its expertise in helping struggling retailers and its experience in real estate and asset management, is an attractive option for Big Lots. The firm will work closely with the retailer to optimally manage its inventory and other assets, as well as assist in store closings that may be required to balance the company’s portfolio. In turn, this will help Big Lots to enhance the value they offer to their customers in the competitive retail market, with the aim of steering them towards a more profitable future.
Big Lots Chairman and CEO, Bruce Thorn, commented on the deal, stating that the company is excited to work with Gordon Brothers and believes that the partnership will help fuel future growth. The investment firm brings valuable experience to the table, and partnering with them will allow Big Lots to focus on their core competencies to deliver value to customers.
While not all Big Lots’ locations will survive this reevaluation of their business, the deal with Gordon Brothers will help the retailer streamline its operations and remain a competitive force in the retail industry. Through strategic restructuring and improved strategic focus, Big Lots aims to pivot into a more profitable future that secures the long-term success of the company.
