The reaper comes knocking for yet another popular US chain store. As Big Lots feels the financial strain, they have filed for Chapter 11 bankruptcy, marking yet another store forced to shut up multiple stores.
Videos by Wide Open Country
The bankruptcy filing for Big Lots has forced them to close many of their stores around the country. Currently, they're forecast to close a total of 550 stores, but so far only 220 have been shut. The rest will follow as the process progresses.
Chapter 11 bankruptcy means that Big Lots will essentially go into administration. They will be treated as though bankrupt, and put under supervision as the reshuffle takes place. This will result in stores shutting, cutbacks being made, and a whole lot of paperwork. However, for now, most of the Big Lots stores will operate as usual. Currently, the states affected by closers will be Phoenix, Arizona, Atlanta, Georgia, and Meridian, Idaho, with Texas and California coming later.
Big Lots Last Stand Against Bankruptcy
In a statement to Nexstar, Big Lots said "We continue to evaluate store closings in light of lease renegotiations and other considerations, and remain committed to keeping our customers informed as we move forward." There is still a chance the popular discount chain could pull it back and avoid complete obliteration.
Despite their looming bankruptcy, Big Lots hasn't given up. Their stores are still gearing up for the holiday period and are strapping in for Black Friday. They have announced their intention to have sales and have even launched a new app. These don't sound like the actions of a business on the brink of bankruptcy. Maybe they have one last trick up their sleeve which is good news for the stockholders.
One of the benefits of filing for Chapter 11 bankruptcy rather than Chapter 7 is the ability to keep the doors open. Although there are going to be a lot of cutbacks and store closures, Big Lots will still be in business after bankruptcy. For stockholders this is key. Their investments will hold their value, and possibly even improve.
With the planned 550 closures, Big Lots will still be left with around 830 stores around the country. It's not as many as previously, but it's certainly not nothing.
