Implements Plan to Accelerate Business
Optimization and Achieve Profitability in 2025
Initiates Voluntary Chapter 11 Process to
Facilitate Restructuring Initiatives and Ownership
Transition
Company Secures Interim Financing to Support
Operations
Customers Will Continue to Find Unmistakable
Value and Extreme Bargains In-Store and Online
Q2 Results In Line With Guidance
COLUMBUS, Ohio, Sept. 9,
2024 /PRNewswire/ -- Big Lots, Inc. (NYSE: BIG) (the
"Company") today announced that it has entered into an agreement
(the "Sale Agreement") with an affiliate of Nexus Capital
Management LP ("Nexus"), pursuant to which Nexus has agreed to
acquire substantially all of the Company's assets and ongoing
business operations. To facilitate the transaction, the Company,
together with each of its subsidiaries, initiated voluntary Chapter
11 proceedings in the U.S. Bankruptcy Court for the District of
Delaware. During and after this
process, Big Lots will continue to serve customers at their nearest
store location or online at biglots.com.
Bruce Thorn, President and Chief
Executive Officer, said, "We are proud of the work we do every day
across Big Lots to provide our customers with unmistakable value
and exceptional savings, as well as building stronger communities
through our philanthropic efforts. The actions we are taking
today will enable us to move forward with new owners who believe in
our business and provide financial stability, while
we optimize our operational footprint, accelerate improvement
in our performance, and deliver on our promise to be the leader in
extreme value."
Mr. Thorn continued, "We appreciate the tremendous loyalty of
our customers, and our core purpose of helping them 'Live BIG and
Save LOTS' has never been stronger. As we move through this
process, we remain committed to offering extreme bargains, enabling
easy shopping in our stores and online, and providing an
outstanding customer experience. We are grateful for the hard work
and dedication of our associates who remain focused on delivering
the best service possible for our valued customers, and we deeply
appreciate the partnership of our vendors as we start a new chapter
for our business."
Evan Glucoft, Managing Director
of Nexus, said, "We are excited to have the opportunity to partner
with Big Lots and help return this iconic brand to its status as
America's leading extreme value retailer. The Big Lots business has
incredible potential and we are confident that its greatest days
are ahead."
Since the pandemic, Big Lots has taken steps to accelerate its
strategic initiatives focused on improving sales and boosting its
long-term performance and profitability. Like many other retail
businesses, the Company has been adversely affected by recent
macroeconomic factors such as high inflation and interest rates
that are beyond its control. The prevailing economic trends have
been particularly challenging to Big Lots, as its core customers
curbed their discretionary spending on the home and seasonal
product categories that represent a significant portion of the
Company's revenue.
While the Company's underlying performance has been improving,
the Board of Directors conducted a broad strategic review of
alternatives and determined that entering into the Sale Agreement
with Nexus, and initiating a court-supervised sale process, is the
best path forward to maximize value and ensure continued
operations.
Ongoing Optimization of Go-Forward Store Footprint
As part of the court-supervised sale process, the Company is
continuing to assess its operational footprint, which will include
closing additional store locations. The Company will also continue
to evaluate and optimize its distribution center model.
Mr. Thorn added, "Though the majority of our store locations are
profitable, we intend to move forward with a more focused footprint
to ensure that we operate efficiently and are best positioned to
serve our customers. To accomplish this, we intend to use the tools
afforded by this process to continue optimizing our store fleet in
an orderly manner."
Additional Information About the Court-Supervised
Process
Under the terms of the Sale Agreement, Nexus will serve as the
"stalking horse bidder" in a court-supervised auction process
pursuant to section 363 of the U.S. Bankruptcy Code. Accordingly,
the proposed transaction is subject to higher or otherwise better
offers, Court approval, and other conditions. Under the Sale
Agreement, if Nexus is deemed the winning bidder, the parties
anticipate closing the transaction during the fourth quarter of
2024.
In connection with the court-supervised process, Big Lots has
secured commitments for $707.5
million of financing, including $35
million in new financing from certain of its current
lenders, in the form of a postpetition credit facility
(collectively, the "DIP Financing Facility"). Upon Court approval,
the DIP Financing Facility, coupled with cash generated from the
Company's ongoing operations, are expected to provide sufficient
liquidity to support the Company while it works to complete the
sale transaction.
The Company has also filed a number of customary motions seeking
Court approval to continue supporting its operations, including
continued payment of employee wages and benefits, and payments to
certain critical vendors in the ordinary course of business. The
Company anticipates receiving Court approval for these requests and
expects to pay vendors in full under normal terms for any goods and
services provided after the filing.
Additional information regarding the Company's restructuring and
sale process is available at a dedicated website,
bigstepforbiglots.com. Court filings and other information related
to the proceedings, including how to file a proof of claim, are
available on a separate website administrated by the Company's
claims agent, Kroll Restructuring Administration LLC, at
https://cases.ra.kroll.com/biglots, by calling toll-free at (844)
217-1398 (or +1 (646) 809-2073 for calls originating outside of the
U.S. or Canada), or by sending an
email to biglotsinfo@ra.kroll.com.
Second Quarter 2024 Preliminary Results
Turning to the Company's second quarter 2024 performance, Mr.
Thorn stated, "Despite a challenging consumer environment and
financial pressures facing our business, we are pleased to have
achieved underlying comp sales, gross margin, and operating
expenses in line with our guidance. Underlying comp sales improved
sequentially relative to Q1 on a year-over-year basis and gross
margins significantly improved, driven in part by advancing our
five key actions, particularly through increasing our extreme
bargain offerings. Additionally, Q3 to date is off to a good start,
with a significant sequential improvement in underlying comp sales
relative to Q2, as well as underlying gross margin expansion versus
last year. We expect the positive momentum to continue into the
back half of the year."
The Company will report full second quarter results as part of
its upcoming 10-Q filing, which is due to be filed on September 12, 2024.
New York Stock Exchange Notice
The Company also announced today that it was notified by the New
York Stock Exchange (the "NYSE") that it is not in compliance with
Section 802.01C of the NYSE Listed Company Manual because the
average closing price of the Company's common shares was less than
$1.00 over a consecutive
30 trading-day period. The notice does not result in the
immediate delisting of the Company's common shares from the
NYSE.
Advisors
Davis Polk & Wardwell LLP is
serving as legal counsel, Guggenheim Securities, LLC is serving as
financial advisor, AlixPartners LLP is serving as restructuring
advisor, and A&G Real Estate Partners is serving as real estate
advisor to the Company. Kirkland & Ellis is serving as legal
counsel to Nexus.
About Big Lots, Inc.
Big Lots is one of the nation's largest closeout retailers
focused on extreme value. The Company is dedicated to being the big
difference for a better life by delivering bargains to brag about
on everything for the home, including furniture, décor, pantry and
more. It fulfills its mission to help customers "Live BIG and Save
LOTS" with sourcing strategies to grow extreme bargains through
closeouts, liquidations, overstocks, private labels, and
value-engineered products. The Big Lots Foundation, together with
the Company's customers, associates, and vendors, has delivered
more than $176 million of
philanthropic support to critical needs in hunger, housing,
healthcare, and education. For more information, to shop online, or
to find a store near you, please visit biglots.com.
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements in this release are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, and such statements are intended to qualify for
the protection of the safe harbor provided by the Act. The words
"anticipate, "estimate," "continue," "could," "approximate,"
"expect," "objective," "goal," "project," "intend," "plan,"
"believe," "will," "should," "may," "target," "forecast,"
"guidance," "outlook" and similar expressions generally identify
forward-looking statements. Similarly, descriptions of our
objectives, strategies, plans, goals or targets are also
forward-looking statements. Forward-looking statements relate to
the expectations of management as to future occurrences and trends,
including statements expressing optimism or pessimism about future
operating results or events and projected sales, earnings, capital
expenditures and business strategy. Forward-looking statements are
based upon a number of assumptions concerning future conditions
that may ultimately prove to be inaccurate. Forward-looking
statements are and will be based upon management's then-current
views and assumptions regarding future events and operating
performance and are applicable only as of the dates of such
statements. Although we believe the expectations expressed in
forward-looking statements are based on reasonable assumptions
within the bounds of our knowledge, forward-looking statements, by
their nature, involve risks, uncertainties and other factors, any
one or a combination of which could materially affect business,
financial condition, results of operations or liquidity.
Forward-looking statements that we make herein and in other
reports and releases are not guarantees of future performance and
actual results may differ materially from those discussed in such
forward-looking statements as a result of various factors,
including, but not limited to, the current economic and credit
conditions, inflation, the cost of goods, our inability to
successfully execute strategic initiatives, competitive pressures,
economic pressures on our customers and us, the availability of
brand name closeout merchandise, trade restrictions, freight costs,
the risks discussed in the Risk Factors section of our most recent
Annual Report on Form 10-K, and other factors discussed from time
to time in other filings with the SEC, including Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K. This release
should be read in conjunction with such filings, and you should
consider all of these risks, uncertainties and other factors
carefully in evaluating forward-looking statements.
You are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date they are made. We
undertake no obligation to publicly update forward-looking
statements, whether as a result of new information, future events
or otherwise. You are advised, however, to consult any further
disclosures we make on related subjects in our public announcements
and SEC filings.
Media Contact:
Aaron
Palash / Richard M.
Goldman
Joele Frank, Wilkinson Brimmer
Katcher
BigLotsMedia@joelefrank.com
212-355-4449
Investor Contact:
Alvin
Concepcion
Investor_Relations@biglots.com
614-278-2705
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SOURCE Big Lots, Inc.