Major discount retail chain ready to file Chapter 11 bankruptcy

The retail sector's struggles over the last two years led to a couple of major chains filing for bankruptcy protection to reorganize or liquidate and close their businesses.

Home decor retailers Bed Bath & Beyond and Tuesday Morning filed for Chapter 11 in 2023 but failed to live to tell the tale their bankruptcy filings and those brick-and-mortar retailers disappeared.

Related: Popular retail product maker files for Chapter 11 bankruptcy

Celebration City and Rite Aid both filed for bankruptcy in 2023, with Celebration City emerging in October 2023, and Rite Aid exiting on Sept. 5, 2024.

Teen apparel chain Rue 21, bargain retail chain ninety nine Cents Best, and residential improvement retailer LL Flooring all filed Chapter 11 bankruptcy in 2024, which led the companies to liquidate their stores.

A couple of mattress retail chains have also filed for bankruptcy within the last two years, including Mitchell Gold + Bob Williams and Z Gallerie filing in 2023 and The RoomPlace, Factory Mattress, Conn's HomePlus and Metro Mattress to this point in 2024.

Fabric and crafts store Joann and mall-based clothing retail chain Express filed Chapter 11 bankruptcy in 2024 and closed stores as section of their reorganizations and continue operating.

Ultimately, bargain home goods retail chain Big A lot plans to file for Chapter 11 bankruptcy as soon as Sept. eight, in quest of to sell all of its assets through a Section 363 bankruptcy process, Bloomberg reported.

Related: Bankrupt Home Depot rival to liquidate remaining stores

The bankruptcy filing and sale are necessary for the company after years of slumping sales. The company in Securities and Exchange Commission filings has blamed elevated inflation for adversely impacting its customers' buying power. Big A lot had claimed its core consumers were hesitant to purchase big-ticket discretionary items.

Big A lot has struggled in recent quarters, as CEO Bruce Thorn said a downturned economy has soured customers and hurt profits. The company had a 10.2% drop in sales to $1.01 billion in the tip of the first quarter and an absence of $132.Three million.

"While we made substantial progress on improving our business operations in Q1, we missed our sales goals due largely to a continued pullback in consumer spending by our core customers, specifically in high ticket discretionary items," Thorn said.

Big A lot plans to continue operating lower than bankruptcy protection and are hunting for for a stalking-horse bidder in a possible sale or auction. The retail chain, which has about 1,four hundred stores, revealed in July that it will close 315 underperforming stores.

More bankruptcy stories:

• Every other well known ice cream brand files for Chapter 11 bankruptcy
• Popular burger chain faces likely Chapter 11 bankruptcy
• Huge shipping company files Chapter 11 bankruptcy to liquidate

The company on Aug. 12 hinted that it'd file bankruptcy soon as its board of directors approved one-time cash retention awards totaling $5.24 million to four top executives, in step with a Securities and Exchange Commission Form eight-K. Offering retention bonuses is a typical practice earlier than a company files bankruptcy.

The one-time bonuses included $Three.15 million for CEO Bruce K. Thorn, $969,938 for Chief Financial and Administrative Officer Jonathan A. Ramsden, and $561,068 every for Chief Legal and Governance Officer Ronald A. Robins Jr. and Chief Human Members of the family Officer Michael A. Schlonsky.

The bargain retail chain on Sept. 6 postponed its 2d-quarter earnings liberate and rescheduled it for Sept. 12.

Big A lot' stock price has fallen by over ninety% within the last year and declined by over Forty three% in after-hours trading on Sept. 6 to twenty-eight cents per share.

Related: Veteran fund manager sees world of pain coming for stocks