Big Lots, a discount home goods retailer, may be heading toward bankruptcy. The company could seek court protection within weeks, according to sources cited by Bloomberg.
They’re also searching for investors to avoid Chapter 11. This news sent their shares tumbling, dropping 27% in extended trading. The stock has already lost nearly 88% of its value this year.
Big Lots is facing liquidity issues due to a decline in sales over the past two years. High interest rates have hurt demand for big-ticket items. The company’s plans aren’t set in stone, though, and their course might change.
Back in June, Big Lots raised concerns about its future. They posted a bigger-than-expected quarterly loss, which cast doubt on their ability to meet credit and loan obligations soon.
As of the end of the first quarter, Big Lots had $289 million in net liquidity. They also held $44 million in cash and cash equivalents.