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Retail chain Big Lots, which specializes in discount home goods, is preparing to file for bankruptcy, joining a number of companies in the U.S. who have done the same in recent months.
Individuals with knowledge of the situation said the chain could file as early as Sunday, according to a report from Bloomberg News. The company is currently planning to sell through its stores through a court-supervised podcast.
The company has been working with advisers from AlixPartners and Guggenheim Partners on the bankruptcy and sale process. The company will continue to operate under Chapter 11 protection and is in the process of lining up what is referred to as a “stalking horse bid,” meaning it is subject to change if better offers materialize, according to the report.
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Big Lots, which has around 1,400 stores and employs over 30,000 people, has suffered from declining sales for years. The situation has worsened in recent quarters, as consumers continue to struggle with inflation and rising costs of living.
The bankruptcy filing comes as America’s lowest income citizens increasingly struggle to make ends meet.
Earlier this week, low income retail chain dollar tree suffered its worst daily decline on the stock market since March 15, 2001 when shares plunged by 22 percent. The massive drop came in reaction to poor second quarter figures, which the company has blamed on a challenging economic environment for low income Americans.
“Clearly, we are not pleased with our second quarter results or having to revise our full year outlook,” Mike Creedon, Dollar Tree’s chief operating officer, said on Wednesday’s earnings call.
Creedon attributed the poor results to the reality of “navigating through one of the most challenging macro environments we’ve ever seen,” according to a report from Forbes. Dollar Tree’s chief competitor, Dollar General, also recently announced that it will be shuttering hundreds of locations across the United States.
To date, shares of major national dollar store chains have had a brutal year, with Dollar General down 39 percent, Dollar Tree down 53 percent and Five Below down 65 percent.
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