Big Lots Keeps Up to 400 Stores Alive in Bankruptcy Sale, but Layoffs Hit HQ, DCs
To close out 2024, Big Lots got the seal of approval that would save the brand and keep hundreds of stores open.
On Tuesday, bankruptcy judge Kate Stickles approved a last-minute sale of 200 to 400 stores to discount retailer chain Variety Wholesalers, Inc., which said it would continue to operate the locations under the Big Lots brand name. According to Big Lots, the sale would preserve 5,000 to 10,000 jobs.
Either one or both of Big Lots’ remaining distribution centers in Alabama and Pennsylvania are expected to be included in the sale.
Variety Wholesalers may employ Big Lots associates at the acquired stores and distribution centers, as well as certain corporate associates needed to support the go-forward footprint, the companies said on Dec. 27 ahead of the bankruptcy court’s approval.
Watch on FN
Sourcing Journal reached out to representatives from Big Lots.
However, there have been casualties across the presently liquidating company throughout its bankruptcy proceedings.
Big Lots began laying off 555 employees at its Columbus, Ohio headquarters starting Dec. 29, with CEO and president Bruce Thorn being among the cuts. It is unclear if Thorn will have a new role with Big Lots under Variety Wholesalers as part of the go-forward plan.
Three executive vice presidents and eight senior vice presidents are impacted by the layoffs, including the chief stores, value sourcing, supply chain and financial officers. Another 27 vice presidents have been impacted by the layoffs, which will continue through April 15.
The retailer filed a Worker Adjustment and Retraining Notification (WARN) Act notice on Dec. 19 outlining the permanent terminations.
The job cuts haven’t just been prepped at the company’s HQ. Big Lots is laying off nearly 1,000 workers across the two remaining distribution centers that are up for sale.
In two separate WARN notices filed on Dec. 24, the retailer said it planned 491 layoffs at its Montgomery, Ala. distribution center, as well as 505 more in Tremont, Pa.
Both sets of layoffs will begin Jan. 6, with the Pennsylvania layoffs anticipated to continue through March 31. The Alabama WARN notice does not share a completion date for the Montgomery job cuts.
Neither of the facilities are slated for closure.
As Big Lots’ fortunes continued to go south in 2024, the company closed hundreds of stores throughout the year, and already shuttered two other distribution centers in Columbus and Apple Valey, Calif. on Oct. 31.
During September and October, Big Lots laid off 370 workers at the Ohio facility and 349 employees at the West Coast site ahead of the closures.
A third distribution center in Durant, Okla. is also closing its doors, according to a report from local Oklahoma TV news affiliate News 12 KXII. The station obtained a letter that was given to the warehouse’s employees saying the facility was permanently shutting down.
The letter said that shutdown procedures began Dec. 19, and all 330 employees will be terminated by March 7.
During the Tuesday court hearing, Judge Stickles said the deal was the best option for Big Lots after its previous $760 million sale agreement to private equity firm Nexus Capital Management fell apart. When that deal went awry in December, the off-price home retailer began liquidation sales across at its 870 remaining stores in preparation for a wind-down of the business.
Last month, the chain reached a deal with Gordon Brothers Retail Partners to sell the stores, distribution centers and intellectual property to retailers who could take over the business. The buyer, Variety Wholesalers, owns more than 400 retail stores in the southeastern and mid-Atlantic U.S. under various discount banners including Roses, Roses Express, Maxway, Bill’s Dollar Stores, Super 10, Super Dollar and Bargain Town.
“This sale agreement and transfer present the strongest opportunity to preserve jobs, maximize value for the estate and ensure continuity of the Big Lots brand,” Thorn said in a statement. “We are grateful to our associates nationwide for their grit and resilience throughout this process.”
Not all parties were thrilled with the results of the resurrection, with vendors like mattress makers Tempur Sealy and Serta Simmons objecting to the sale since Big Lots has yet to fully pay them for orders after it filed for Chapter 11 bankruptcy in September.
According to a Reuters report, Serta attorney Beth Rogers said Big Lots continued to order furniture and other inventory even after realizing it would not have the funds to pay for them, racking up $250 million in new debts that will likely go unpaid under the revised sale agreement.
