By Katabella Roberts

Discount retail chain Big Lots is shuttering more than 50 stores across California following a drop in customer spending and economic challenges.

The store locator function of the chain’s website shows 54 stores that will close across the state, but it’s not clear exactly when they will close.

Big Lots said in a June filing with the U.S. Securities and Exchange Commission (SEC) that it plans to open three stores nationwide this year and close 35 to 40.

Prior to the announcement, Big Lots had 1,392 stores throughout the United States.

In its SEC filing, the Columbus, Ohio-headquartered company said the planned closures follow “macroeconomic challenges” within the U.S. economy, such as inflation, that had “adversely impacted” the buying power of its customers.

The retailer also warned in its SEC filing that, based on current cash and liquidity projections, it has “substantial doubts” about its ability to continue. It also cited a “significant likelihood” that Big Lots won’t meet the terms of a 2022 credit agreement.

Big Lots said it has incurred net losses and used cash in operating activities in 2022, 2023, and the first quarter of 2024.

In its June earning results, the company reported net sales for the first quarter of fiscal 2024 of $1.009 billion, a 10.2 percent drop from the same period a year earlier. It also reported a net loss of $205 million, or $6.99 per share, for the first quarter of fiscal 2024.

At the time, Big Lots CEO Bruce Thorn said the company had missed its sales target largely because of “continued pullback in consumer spending by our core customers, particularly in high ticket discretionary items.”

Still, he vowed to continue transforming the business.

“The current financial performance does not yet reflect the stronger business model that we’ve created through our five key actions, but we expect the fruits of those efforts to become more apparent in the back half of the year,” Mr. Thorn said.

Sourced from ZeroHedge

Image credit: Justin Sullivan/Getty

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