Home Retailer Big Lots Seeks More Financing as Losses Pile Up

(Bloomberg) -- Off-price home goods retailer Big Lots Inc. has been reaching out to prospective investors to gauge interest in providing a new loan that would be backed by assets like the company’s leases, according to people with knowledge of the matter.

The Columbus, Ohio-based chain needs more money despite receiving a loan earlier this year for up to $200 million. Big Lots has suffered from years of same-store sales declines. Its stores numbered almost 1,400 as of May, according to regulatory filings.

The discount chain has recently renewed its focus on extreme bargains and closeout sales after an emphasis on furniture backfired amid a decline in new home sales and renovations. Big Lots is also examining whether it can sub-lease certain locations to bring in more cash, the people said. 

Representatives for Big Lots didn’t respond to requests for comment. 

Big Losses

For the three-months that ended May 4, the company saw its net sales drop 10.2% to about $1.01 billion compared to a year earlier. 

Chief Executive Officer Bruce Thorn cited a “challenging consumer environment” and “strained budgets” in its first quarter earnings call. The company reported a net loss of $205 million for the period.

In April, the chain received a $200 million loan from an affiliate of Gordon Brothers. 

Big Lots is among other troubled retailers that have been impacted by a slowdown in home spending. Furniture retailer Conn’s Inc. filed for bankruptcy this week, while LL Flooring Holdings Inc. is considering a Chapter 11 filing, Bloomberg reported.

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