Big Lots faces bankruptcy amid rising inflation and sales decline

Big Lots, a discount home goods retailer with approximately 1,400 stores and over 30,000 employees, is preparing to file for bankruptcy due to ongoing financial struggles. The company has faced declining sales for several years, exacerbated by rising inflation that has impacted its budget-conscious customer base. Reports indicate that the bankruptcy filing could occur as early as Sunday, with plans to sell its stores through a court-supervised process while operating under Chapter 11 protection. The retailer is currently working with advisers from AlixPartners and Guggenheim Partners to navigate the bankruptcy and sale process. A stalking horse bid is being arranged, which allows for better offers to be considered should they arise. This situation reflects a broader trend in the retail sector, as other companies like Red Lobster and Blink Fitness have also filed for bankruptcy recently. The economic environment, characterized by high inflation, has made it increasingly difficult for consumers, particularly those in the middle class, to afford basic necessities. This has led to a significant decline in sales for discount retailers, as even dollar stores are seeing reduced patronage. Big Lots' share price has plummeted from over $72 in 2021 to around $0.50, highlighting the severity of its financial woes. The challenges faced by Big Lots are indicative of a larger crisis in the retail industry, where many companies are struggling to adapt to changing consumer behaviors and economic pressures. The impending bankruptcy filing underscores the urgent need for strategic changes within the company to survive in a competitive market.