The year 2024 represented a very complicated year for commerce, as it left many well-known companies in bankruptcy. In this context, it was learned that a well-known retailer is closing all its stores and declaring bankruptcy. This is sad news, but unfortunately it is only a reflection of what is happening with the commercial activity in the United States.
Discount housewares chain Big Lots shocked the retail world by revealing that it will begin liquidation sales. All U.S. stores will carry low-priced products for the next few days while supplies last. The decision was made after a proposed sale deal with rival bidder Nexus Capita Management fell through. This was explained by the company itself in a statement released on December 19.
A failed agreement
The company said it does not expect to complete a previously announced asset purchase agreement with Nexus. However, it will continue to pursue an alternative branded business transaction with Nexus or any other party interested in entering into an agreement.
The well-known retail chain maintains that its primary objective now is to complete a Section 363 bankruptcy sale by early January 2025. It also believes that liquidation sales do not preclude it from completing a going concern transaction. As such, it will continue to service customers in its stores and online as the liquidation approaches.
Notably, Big Slots filed a Chapter 11 projection petition on September 9 with the U.S. Bankruptcy Court for the District of Delaware. With such document, it intended to sell its assets to the bidder Nexus Capital Management for an offer of US$760 million. This included US$2.5 million in cash, payment of debts and assumption of liabilities.
Other retail chains declared bankruptcy
Discount retailer 99 Cents Only was another popular chain that filed for Chapter 11 bankruptcy last April 8, 2024. This led it to liquidate and close more than 370 branches in states such as Arizona, California, Nevada and Texas.
Separately, in mid-December, documents surfaced stating that the party supply retail giant’s parent company, Party City, was considering filing for bankruptcy. The filing was made on December 21 in the U.S. Bankruptcy Court for the Southern District of Texas. This is the company’s second filing in two years.
According to the information that came to light, Party City Holdco, which has approximately 700 stores in Canada, Mexico and the United States, was behind in the payment of rent for some of its branches. In addition, they were beginning to run out of cash and the delayed sales were making it difficult for the company to make payments on its large debt load.
Party City’s final collapse
The bankruptcy filing lists assets and liabilities that ranged from $1 billion to $10 billion. For its part, the company estimated that it had more than 10,000 creditors. Against this backdrop, the retail chain’s operations collapsed and it filed for bankruptcy last December 20. On that date, the company’s CEO, Barry Litwin, told all corporate employees, during a meeting via videoconference, that the company was closing its operations immediately. In this way, he announced that it was his last day as an employee.
Other workers were told that they would not receive severance pay and that their benefits would end once the company closes. Some received letters stating that the company would end operations on February 28, at which time they would all be laid off.
