:max_bytes(150000):strip_icc()/GettyImages-2165823902-129bbded011f4b76aaf7f5bf98713e64.jpg "Big Lots stock plunges after reports emerge that retailer is considering filing for bankruptcy")
Key findings
- Big Lots shares plummeted after news broke that the discount retailer plans to file for bankruptcy in the coming weeks.
- The company is also looking for investments to avoid Chapter 11 bankruptcy. Bloomberg reported.
- Declining sales have hurt Big Lots’ earnings and stock price.
Discount retailer Big Lots (BIG) is reportedly looking for investors to avoid filing for Chapter 11 bankruptcy following a prolonged decline in sales and several quarters of losses.
The company has received at least one loan of up to $200 million so far this year. Bloomberg reports that Big Lots has been in talks with potential investors over the past month.
Despite difficulties, managers received “retention bonuses”
A regulatory notice from earlier this month revealed that four Big Lots executives recently received “retention bonuses” totaling over $5 million, which Bloomberg And Dive in retail The reported numbers could be an indication that a bankruptcy filing could be in the offing, and bonuses are being paid to ensure that key executives do not leave the company during the proceedings.
The retailer reportedly worked with consulting firm AlixPartners last year to get costs under control amid declining sales.
Big Lots did not immediately respond to a request for comment.
Big Lots shares fell more than 22 percent in early trading Thursday, closing at about 72 cents a share. They have lost more than 90 percent of their value since the beginning of the year.
