Struggling discount retail chain files for Chapter 11 bankruptcy

The retail sector suffered more significant financial disaster filings in 2024 after facing a few notable Chapter Eleven cases within the previous year.

Some big-name retail chains that filed Chapter Eleven this year and continue in business consist of mall-based clothing retail chain Express and fabric and crafts store Joann.

Related: Major shipping company shuts down; no financial disaster filing yet

Retailers that weren't as successful in financial disaster included home improvement retailer LL Flooring, teen apparel chain Rue 21, and cut price retail chain ninety nine Cents Best, which all filed Chapter Eleven financial disaster in 2024 with plans to liquidate and shut all of their stores.

A couple of restaurant chains joined these retail chains in Chapter Eleven to reorganize their businesses, as Italian eatery Buca di Beppo filed on Aug. 5, Mexican chain Rubios owned by MRRC Holdco filed on June 5 and seafood giant Red Lobster declared financial disaster on May 19.

The previous year also featured major retail chains filing financial disaster, including Celebration City, which emerged from Chapter Eleven in October 2023 and Rite Aid in some way exiting on Sept. 5, 2024. Home decor retailers Bed Bath & Beyond and Tuesday Morning filed for Chapter Eleven in 2023 and both liquidated their brick-and-mortar locations.

Big A lot to sell its assets in Chapter Eleven

Finally, popular cut price home goods retail chain Big A lot (BIG) on Sept. 9 filed for Chapter Eleven protection within the U.S. Financial disaster Court for the District of Delaware seeking a sale of its assets to its stalking-horse bidder Nexus Capital Management for a $760 million bid, which contains $2.5 million in cash, debt payoff, and assumption of liabilities.

Related: Mattress Firm rival files for Chapter Eleven financial disaster

An auction will probably be held on Oct. 18 if a pair of bidder submits an offer, with a hearing to approve a sale proposed for Nov. four, per the debtor's bidding procedures motion.

Nexus will probably be entitled to a $7.5 million break-up fee and as much as $1.5 million in expenses if that is miles now not the successful buyer at an auction.

More financial disaster stories:

• Every other popular ice cream brand files for Chapter Eleven financial disaster
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• Huge shipping company files Chapter Eleven financial disaster to liquidate

Big A lot, the nation's fourth largest home goods retailer with general operating revenues of $four.7 billion in 2023, is likewise seeking $707.5 million in debtor-in-possession financing, including $35 million in new money term loans to meet the debtor's financial needs within the course of the financial disaster process.

The Columbus, Ohio, debtor said a few significant macroeconomic and industrial-specific headwinds including high competition, Covid-19 disruption, a high rate of interest environment, and a less dependable supply chain that increased operating costs were the explanations the corporate needed to file financial disaster, Big A lot chief financial officer Jonathan Ramsden said in a Sept. 9 declaration.

The financial disaster filing and sale are necessary for the corporate 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 buy big-ticket discretionary items.

Big A lot has struggled in most up-to-date quarters. CEO Bruce Thorn said a downturned economy had soured customers and hurt profits. The company had a 10.2% drop in sales to $1.01 billion within the course of the first quarter and a loss of $132.3 million.

"While we made substantial progress on making improvements to 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 in its petition listed $1 billion to $10 billion in assets and liabilities. Its debts consist of $556.1 million in funded debt obligations that consist of a $433.6 million asset-based lending facility and a $122.5 million term loan.

The good deal home goods retailer changed into established in 1967 and operates over 1,300 stores in 48 states. The debtor in July revealed that it planned to close 315 stores nationwide.

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