The retail landscape continues to shift dramatically, and Big Lots, a popular discount retailer, is the latest casualty of President Biden’s disastrous economic policies. The Columbus, Ohio-based chain, known for offering affordable furniture, home decor, and seasonal products, has filed for Chapter 11 bankruptcy protection, citing a sharp decline in consumer spending due to high inflation and interest rates.
As Big Lots struggles to stay afloat, it plans to sell its assets and business operations to private equity firm Nexus Capital Management. This comes at a time when American families are feeling the pinch, forced to cut back on home essentials thanks to a weakened economy that many argue has been mismanaged by the current administration. With the cost of living soaring, retailers like Big Lots are finding it impossible to keep up.
In a statement on Monday, the company pointed directly to the economic challenges hitting its core customers. While Big Lots has long relied on consumers purchasing home and seasonal products for a large portion of its revenue, inflation and rising interest rates have caused a dramatic pullback in spending. For nine consecutive quarters, sales at stores open at least a year—a key indicator of a retailer’s health—have been on the decline.
While Big Lots claims that performance has been improving, its board determined that selling to Nexus Capital was the right move for the business. This strategic decision comes after a long struggle to regain its footing in a competitive market where other value retailers seem to be doing a better job offering lower prices and better bargains.
Nexus Capital will act as a “stalking horse” bidder in the court-supervised auction, but this doesn’t guarantee the firm will win. Other bids could emerge that offer better terms. Should Nexus prevail, the sale is expected to be finalized by the fourth quarter. Bruce Thorn, Big Lots’ president and CEO, expressed optimism in a statement, claiming the move would bring “financial stability” and help the company optimize its operations and improve performance.
But is this really a story of financial mismanagement at Big Lots, or is it a reflection of the broader economic crisis that has impacted American businesses and households alike? Critics argue that the Biden administration’s policies—massive government spending, reckless inflation, and high interest rates—have put businesses in a vice. While the government tries to spend its way out of problems, everyday Americans are left with fewer dollars in their pockets and fewer options in stores like Big Lots.
The company will continue to operate its nearly 1,400 stores in 48 states as the sale process plays out. However, it did confirm that some stores will close, though the specifics of how many and which locations remain unclear.
Adding to Big Lots’ troubles, the New York Stock Exchange recently notified the company that its stock price had dipped below $1 for 30 consecutive days, putting it at risk of delisting. In premarket trading, shares dropped another 40%, plummeting to a mere 30 cents.
Despite securing $707.5 million in financing, including $35 million in new loans, the road ahead for Big Lots looks rough. And unfortunately, it’s not the only company to find itself in dire straits. Big Lots’ troubles are a symptom of a broader economic decline that many conservatives see as the result of poor economic policy from Washington.
The lesson here? Until economic sanity returns to Washington, don’t be surprised to see more businesses following Big Lots down the bankruptcy path.
