Big Lots is reportedly considering bankruptcy amid continued declines in sales.
The off-price home goods retailer received a loan earlier this year to help it navigate a liquidity crunch and is now seeking investors in an attempt to avoid bankruptcy, Bloomberg reported Wednesday (Aug. 28), citing unnamed sources.
No final decision has been made on any of these plans, according to the report.
The retailer has seen years of sales declines, per the report.
Big Lots did not immediately reply to PYMNTS’ request for comment.
During a June 6 earnings report, the company reported lower-than-expected first-quarter fiscal 2024 financial results, attributing its 10.2% net sales decrease in part to shoppers’ belt-tightening behaviors.
“We missed our sales goal due largely to continued pullback and consumer spending by our core customers, particularly in high-ticket discretionary items,” Big Lots President and CEO Bruce Thorn said at the time. “The consumer environment softened in the first quarter, and both consumer confidence and sentiment declined due to concerns about inflation, unemployment and interest rates.”
Another player in this space, Wayfair, also recently reported seeing continued pressure on home goods consumers.
The online retailer that sells home goods and furniture reported second-quarter earnings showing that total revenues dipped 1.7%, with U.S. revenues down 2%. Wayfair also saw a 2.9% decrease in the number of orders delivered, as well as a 2.4% decrease in orders by repeat customers.
“Customers remain cautious in their spending on the home, and our credit card data suggests that the category correction now mirrors the magnitude of the peak-to-trough decline the home furnishing space experienced during the great financial crisis,” Wayfair Co-founder, Co-chairman and CEO Niraj Shah said in an Aug. 1 earnings release.
Many shoppers are turning to secondhand channels to buy home furnishings and other big-ticket items, according to the PYMNTS Intelligence report, “Consumers Shop Secondhand Stores as Often as Other Retail.”
The report found that among the 43% of consumers who used secondhand channels to make retail purchases last year, one in five did so to buy furniture. Among bridge millennials and millennials, that share jumped to 38% and 34%, respectively.
