Big Lots Inc. has struck a deal to save hundreds of its stores after a previous sale fell through, preventing the chain from closing entirely.
On Friday, the company announced it had agreed to a transaction with Gordon Brothers Retail Partners LLC. This deal will transfer Big Lots’ brand, stores, and distribution centers to other operators. It comes after an earlier deal with Nexus Capital Management LP collapsed.
Variety Wholesalers Inc., which operates discount chains in the Southeast and mid-Atlantic, plans to acquire between 200 and 400 Big Lots locations. They intend to keep the stores under the Big Lots name and may hire some Big Lots associates at the acquired locations and distribution centers.
The deal still needs to meet certain conditions and must be approved by a bankruptcy judge. Big Lots is set to appear in Delaware bankruptcy court on Monday.
When Big Lots filed for Chapter 11 in September, it had more than 1,300 stores and over 27,000 employees. It had been working on a sale to Nexus, but the deal fell apart when the company’s inventory appraisal came in lower than expected, making the sale no longer viable.
After that, Big Lots announced it would begin going out-of-business sales at around 870 locations. Advisors were brought in to find an alternative deal to save as many stores as possible. Judge J. Kate Stickles, overseeing the case, warned the company had little time left.
Big Lots President and CEO Bruce Thorn said the deal with Gordon Brothers and Variety Wholesalers is the best option to save jobs and the Big Lots brand while maximizing the value of its assets.
The case is Big Lots Inc., number 24-11967, in the US Bankruptcy Court for the District of Delaware.