As an expansion of its efforts to “aggressively address underperforming stores,” Big Lots is increasing its store closure range from 150 to 315 stores.
The company, which has reconfigured financing as it has suffered losses and lower comparable sales, has entered into an amended credit agreement and, as part of a filing with the United States Securities and Exchange Commission, stated that the deal would pave the way for an increase in potential store closings from 150 to 315 as well as reduce and aggregate commitments under the original credit agreement from $900 to $800 million as it increases the interest rate applied to borrowings by 50 basis points. The amended agreement also requires the company to deliver additional reports to its lenders.
In a first-quarter conference call, Bruce Thorn, Big Lots president and CEO, said most of the company’s store base has healthy unit economics, with 70% of locations generating positive four-wall adjusted EBITDA. However, a significant number of underperforming stores remains a situation that Big Lots has been working to address. The immediate goal of the store closing initiatives is realizing most of the $200-plus million of bottom-line savings opportunities that the company identified as needed in its Project Springboard go-forward strategy.
Big Lots ended the first quarter with 1,392 stores.
