Big Lots to close up to 40 stores amid "substantial doubt"

Big Lots, a prominent discount retailer, has announced plans to close up to 40 stores this year. 

The Ohio-based company – which has around 1,400 stores nationwide – disclosed dismal fiscal reports in a June SEC filing, attributing the closures to ongoing inflation and a decline in consumer spending.

Big Lots’ financial struggles have been exacerbated by inflation, which has significantly impacted consumer purchasing power. This decline in spending has forced the retailer to reassess its store footprint, leading to the planned closures.

Financial uncertainty and potential bankruptcy

In the recent financial filings, Big Lots expressed "substantial doubt" about its ability to continue operating. These documents suggest that bankruptcy may be on the horizon if the retailer cannot stabilize its financial situation.

A sign is posted in front of a Big Lots store on June 07, 2024 in Hercules, California.  (Photo by Justin Sullivan/Getty Images)

Despite the planned closures, Big Lots had initially announced intentions to open three new stores in 2024. However, there is currently no information on when or where these new stores will be established.

Broader trend of retail struggles

Big Lots is not alone in facing these challenges. Other major retailers, including Rite Aid, Red Lobster, and Walmart, have also announced store closures in 2024, with some even considering bankruptcy as a viable option.

The financial difficulties faced by Big Lots and other retailers underscore the broader challenges brick-and-mortar stores are experiencing in the current economic climate. Rising operational costs and shifting consumer behaviors continue to pressure traditional retail models.