Bankruptcy
Big Lots, formerly the largest close-out retailer in the United States, filed for Chapter 11 bankruptcy in September 2024. The filing followed several years of declining sales, increasing debt, and unsuccessful efforts to revive the business. The case is cited as an example of how economic pressures, changes in consumer behavior, COVID-induced supply chain shortages, and strategic missteps can contribute to the collapse of a long-standing retail chain.[26][27][28]
Big Lots attributed its bankruptcy to persistent inflation and high interest rates, which it said had reduced spending by its core lower-income customers. However, court documents indicated that the company’s financial problems stemmed from a heavily leveraged balance sheet, including sale-leaseback agreements, rising logistics costs, and nine consecutive quarters of same-store sales declines.[26][27][28] The Chapter 11 filing enabled the company to secure $707.5 million in debtor-in-possession (DIP) financing and propose a stalking-horse sale to Nexus Capital.[26][27][29] After the deal fell through in December 2024, liquidation sales began at all 963 stores.[30][31][32]
One of the key factors contributing to Big Lots’ financial decline was a sustained drop in revenue. The company’s annual revenue fell from $6.19 billion in 2020 to $4.51 billion on a trailing twelve-month basis in 2024, a decline of 27.1%.[33] Comparable store sales decreased by 9.9% in the first quarter of 2024 and 8.6% in the fourth quarter of 2023, extending a streak of nine consecutive quarters of negative same-store sales.[34][35]
On January 1, 2025, a U.S. bankruptcy court approved a sale agreement allowing Gordon Brothers Retail Partners to sell between 200 and 400 Big Lots stores, as well as distribution centers and intellectual property, to Variety Wholesalers Inc. The decision, approved by Judge Kate Stickles, faced objections from several vendors. Companies such as Tempur Sealy and Serta Simmons argued that the deal prioritized repayment to lenders while leaving trade creditors with substantial losses. They also alleged that Big Lots accrued approximately $250 million in vendor debt after becoming aware it would be unable to fully repay its obligations.
On November 10, 2025, the former company, now doing business as Former BL Stores, Inc., converted their Chapter 11 case to a Chapter 7 bankruptcy liquidation.[36]
