Big Lots is reportedly considering bankruptcy amid continued declining sales.
The discount home goods retailer received a loan earlier this year to overcome a liquidity crisis and is now seeking investors to avoid bankruptcy, Bloomberg reported on Wednesday (Aug. 28), citing unnamed sources.
No final decision has been made on any of these plans, the report says.
According to the report, the retailer has been experiencing declining sales for years.
Big Lots did not immediately respond to PYMNTS’ request for comment.
In a June 6 earnings report, the company reported lower-than-expected financial results for the first quarter of fiscal 2024, attributing the 10.2% decline in net sales in part to shoppers’ savings behavior.
“We missed our revenue target, largely due to the continued decline and consumer spending by our core customers, particularly on high-cost consumer goods,” Big Lots President and CEO Bruce Thorn said at the time. “The consumer environment weakened in the first quarter, and both consumer confidence and sentiment deteriorated due to concerns about inflation, unemployment and interest rates.”
Another player in this space, Wayfair, also recently reported ongoing pressure on home goods consumers.
The online home goods and furniture retailer reported a 1.7 percent decline in overall sales for the second quarter, with U.S. sales down 2 percent. Wayfair also saw a 2.9 percent decline in shipped orders and a 2.4 percent decline in repeat customer orders.
“Customers remain cautious with their home spending and our credit card data suggests that the category correction now reflects the magnitude of the peak-to-trough decline that the home furnishings space experienced during the Great Financial Crisis,” said Niraj Shah, Wayfair co-founder, co-chairman and CEO, in an Aug. 1 earnings release.
According to the PYMNTS Intelligence report “Consumers Shop Secondhand Stores as Often as Other Retailer,” many shoppers turn to secondhand channels to purchase home furnishings and other expensive items.
The report found that of the 43% of consumers who used secondhand channels for retail purchases in the past year, one in five did so to buy furniture. Among millennials, that share rose to 38% and 34%, respectively.
