In a recent filing, well-known discount retailer Big Lots informed financial regulators that the company’s extraordinary losses over the previous two years have created “serious uncertainty about the company’s capacity to continue.”
According to the Daily Mail, the Ohio-based homeware business, which has about 1,400 stores throughout the country, experienced a sharp $132 million loss in the first three months of 2024 after declining since 2022.
Chief Financial Officers of Big Lots, according to recent quarterly reports filed with the U.S. Securities and Exchange Commission (SEC), said that the company’s financial difficulties caused executives to deplete their personal savings intended for stock purchases.
Big Lots informed the federal authorities:
“The Company has decided there is a great likelihood that it will not be able to comply with the Excess Availability Covenant in line with the 2022 Credit Agreement within the upcoming 12 months, which creates substantial doubt over the Company’s ability to keep going concern,” the statement reads. “Based on our cash projections, as well as uncertainties with respect to managing the effect of management’s plans.”
Company representatives went on, “An event of default would result in failure to comply with the Excess Availability Covenant, which might lead to an acceleration of our obligations with the Term Loan Facility and the 2022 Credit Agreement.” “We cannot guarantee that the loan parties under the 2022 Credit Agreement or the Term Loan Facility would overlook the company’s noncompliance with the Excess Availability Covenant.”
Store managers at Big Lots “said they are not surprised,” according to the Daily Mail. They assert that the corporation ships them enormous quantities of goods, but not the ones that the clients desire.
The company’s stock price dropped to barely $1.71 on Wednesday before the market closed for Independence Day, despite reaching a peak of $72.31 in 2021. According to reports, the stock has decreased by 81 percent this year and 48 percent last month.
The financial difficulties faced by Big Lots coincide with those of other well-known bargain retailers, such as Dollar Tree, Family Dollar, and 99 Cents Only, which announced the closing of all 371 of its sites in April.
Comments are closed.