In a significant turn of events, Big Lots has secured a deal that will preserve hundreds of its retail locations, marking a dramatic shift from its earlier plans to shutter all stores. The discount home goods retailer, which filed for Chapter 11 bankruptcy protection in September 2024, has reached an agreement with Gordon Brothers Retail Partners that will enable the continuation of 200 to 400 stores under the Big Lots brand name.
The development comes after a turbulent period for the retail chain, which initially sought to sell its assets to Nexus Capital Management for $760 million in a deal that subsequently fell through. Following that setback, Big Lots announced on December 19 that it would commence going-out-of-business sales across its entire network of 1,392 stores spanning 48 states.
However, the new arrangement with Gordon Brothers includes provisions for transferring stores, distribution centers, and intellectual property to various retailers and companies. A key component of this deal involves Variety Wholesalers Inc., which will acquire and operate between 200 and 400 Big Lots locations while maintaining the established brand name. The agreement also encompasses up to two distribution centers and offers potential employment opportunities for current Big Lots associates at the acquired locations.
Variety Wholesalers, which currently operates more than 400 retail establishments throughout the Southeast and Mid-Atlantic regions under various banners including Roses, Maxway, and Bill’s Dollar Stores, will now add Big Lots to its portfolio of retail brands.
This development occurs against the backdrop of a challenging year for retail businesses, with several chains facing financial difficulties and bankruptcy filings. The sector has grappled with ongoing challenges stemming from the COVID-19 pandemic’s aftermath, rising interest rates, and persistent inflation, which have collectively increased operational costs and debt burdens.
Notable casualties in the retail sector during 2024 included 99 Cents Only, which liquidated all 371 of its locations across four states after failing to reorganize under Chapter 11 bankruptcy. Party City faced particularly severe difficulties, culminating in a December Chapter 11 filing and the immediate cessation of operations, leaving employees without severance pay and benefits.
The Container Store also encountered significant financial hurdles, including the collapse of a potential $40 million investment from Beyond and subsequent delisting from the New York Stock Exchange. The company filed for Chapter 11 bankruptcy on December 22 with a prepackaged reorganization plan aimed at restructuring its debts and transferring ownership to term loan lenders.
These retail sector struggles reflect broader economic challenges, including the lingering effects of pandemic-related disruptions, which forced many chains to temporarily close and implement customer limitations upon reopening. The subsequent rise in interest rates has complicated financing options for retailers, while inflation has driven up costs for goods and labor.
The Big Lots agreement represents a rare positive outcome in this challenging retail environment, preserving a significant portion of the chain’s operations and potentially saving numerous jobs through the transfer to Variety Wholesalers’ management. This development suggests that while the retail sector continues to face significant headwinds, strategic partnerships and restructuring efforts can sometimes result in partial preservation of established retail brands.