Another big-box retailer is announcing Chapter 11 bankruptcy reorganization, and this time at least one of Wyoming’s stores is on the chopping block.
Wyoming will lose its Big Lots store in Cheyenne, which has already announced a liquidation sale of up to 40% off for the store located at 3501 E. Lincolnway.
Meanwhile, the Casper store at 2141 E. 12th St. is not on the liquidation list of 300 stores just yet. But it’s too soon to say if the store is safe.
In its Chapter 11 filing, Big Lots said it will need to continue “optimizing” its store footprint and that it will likely need to close additional store locations to ensure efficient business operations.
As part of the Chapter 11 reorganization Big Lots announced Monday, company officials said the store has entered into an agreement with Nexus Capital Management LP to acquire most of its stores. This is a “stalking horse bid,” and, as such, is subject to higher or better offers, as well as court approval.
Stalking horse bids refer to the situation where a bankrupt company’s creditors solicit a first, favorable bid to stave off low-ball offers for a bankrupt company that’s trying to reorganize.
High Inflation, Theft?
Big Lots officials blamed its bankruptcy on high inflation and interest rates, as well as changes to consumer purchasing behavior.
However, employees who work at Big Lots took to Facebook to suggest an alternate factor in the bankruptcy — high crime rates.
A woman who identified herself as Danielle M McCann on Facebook said the store was experiencing “high theft rates” in the comments of a post in the group, Cheyenne Community Connections.
“We lose more money than we are bringing in,” she wrote in her post.
Wyoming has not had “smash and grab” gangs like states such as Oregon, where organized crime has become involved, but law enforcement officials have told Cowboy State Daily they’ve seen a rise in thefts like shoplifting and larceny.
It’s difficult to pin down just how big the problem really is, Laramie County Sheriff Brian Kozak told Cowboy State Daily at the time, because many stores do not report such incidents to local law enforcement.
“If a store is not catching shoplifters, then it’s not reported,” he said. “So, we just don’t know the true numbers. Other than their bottom line — they know when they do their accounting at the end of the month or at the end of the year how much loss they had.
“But I know for a lot of these big-box stores, it’s over $1 million a year.”
Big Lots Liquidation Discount Will Rise
McCann also told posters that the Big Lots store in Cheyenne would remain open for 12 to 16 weeks to liquidate all of its inventory, with the percentage off growing each week.
Food items, however, won’t be discounted.
During the first week, that percentage appeared to be around 5 to 10%, according to posts by various Big Lots customers shopping at the store.
Big Lots said in media statements that it has filed a number of motions so it can continue supporting its operations, including continued payment of employee wages and benefits and payments to its critical vendors.
Big Lots was founded in 1967 as Consolidated International by Sol Shenk, who made a name for himself as an extreme close-out artist for auto parts and vehicles in the 1970s.
He launched the Odd Lots/Big Lots closeout chain not long after that, in 1982, and continued to grow the store doing business as Big Lots, Odd Lots, Mac Frugal’s Bargains, *Closeouts, and Pic ’N’ Save.
Eventually the array of stores was consolidated into one big Big Lots brand in 2001, offering all kinds of brand-name items at steep discounts, from home decor and electronics to toys, gifts, furniture and even food.
Big Lots is just the latest discount retailer to struggle in the current inflationary environment. Dollar stores like Dollar Tree and Dollar General have also been struggling as their traditional low-income customers have dramatically cut back on spending.
Dollar General, in particular, gets 60% of its business from households that earn $35,000 or less annually. Dollar Tree’s customers are in a slightly higher income bracket, but one that’s also seen some strain.
Renée Jean can be reached at renee@cowboystatedaily.com.
