Home goods chain Big Lots got a reprieve to keep hundreds of stores open after a bankruptcy judge approved a last-minute sale to new owners, according to a report.
US Bankruptcy Judge Kate Stickles gave the go-ahead for the sale of 200 to 400 stores at a court hearing Tuesday in Wilmington, Del., saying the offer was the best option after an initial bankruptcy deal fell apart last month.
Shortly after Christmas, the Columbus, Ohio-based home goods chain said it had reached a deal with Gordon Brothers Retail Partners to sell the stores, distribution centers and intellectual property to retailers who could take over the business.
As part of the deal, Variety Wholesalers will take on 200 to 400 Big Lots stores – preserving 5,000 to 10,000 jobs, Big Lots said.
Financial terms of the sale were not disclosed
Big Lots did not immediately respond to a request for comment.
The court ruling comes days after Mitch Modell — the former chief executive of the famed New York sporting goods chain Modell’s, which went under four years ago — said he wanted to save Big Lots.
The 70-year-old is looking to raise $1 billion to buy Big Lots and fellow bankrupt retailer Party City, The Post reported on Monday.
Big Lots, which had 1,300 stores and more than 27,000 employees when it filed for bankruptcy in September, had announced plans to sell its business to private equity firm Nexus Capital.
But last month, Big Lots revealed the deal had fallen apart. The discount retailer initiated “going-out-of-business” sales at its remaining 900 stores, after having already closed about 400 stores in 2024.
The eleventh-hour deal with Gordon Brothers does not provide enough money to fully repay Big Lots vendors, including mattress makers Tempur Sealy and Serta Simmons.
Both brands continued to sell goods to Big Lots after it filed for bankruptcy.
Many vendors fought against the sale, arguing Gordon Brothers should not be able to acquire Big Lots’ assets without providing enough support for vendors.
Serta’s attorney Beth Rogers said Tuesday that Big Lots continued to order furniture even after it realized it would not be able to repay vendors – piling on $250 million in new debts.
Tempur Sealy and Serta did not immediately respond to a request for comment.
When Big Lots filed for bankruptcy, it was the fourth-largest home goods retailer in the country. The company earned $4.7 billion in revenue in 2023.
But like other home goods retailers including Conn’s, Home Depot and Lowe’s, Big Lots struggled with falling sales as cash-strapped customers delayed home improvement projects and a tough housing market squashed home sales – meaning less need for new furniture in new houses.
The financial pressure ultimately pushed Big Lots, which already had $556.1 million in debt, under water.