Gordon Brothers and Variety wholesalers step in to save some big consignment stores

On December 29, 2024By Littum

HERCULES, CALIFORNIA – JUNE 07: A sign is posted in front of a Big Lots store on June 7, 2024 in … (+) Hercules, California. Discount retailers reported first-quarter earnings that missed analysts’ expectations, with net sales of $1.009 billion, compared with $1.124 billion a year ago. (Photo by Justin Sullivan/Getty Images)

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Gordon Brothers Retail Partners has just thrown a lifeline to close retailer Big Lots after an earlier deal with Nexus Capital Management to buy the business fell through.

Before Gordon Brothers stepped in, Big Lots announced it was forced to close all 900 stores. Now between 200 and 400 Big Lots stores will live to see another day.

“Good news on the retail jobs front this morning,” wrote Neil Saunders, CEO of GlobalData Retail LinkedIn. “Big Lots, which filed for bankruptcy in September, has reached an agreement with Gordon Brothers Retail Partners to keep hundreds of stores open and save thousands of jobs.”

Gordon Brothers, who handled Big Lots’ sales only, have agreed to buy all Great Lots of assetsincluding stores, distribution centers and intellectual property that it plans to resell to other retailers and businesses.

And that has secured the first buyer. Variety Wholesalers will acquire between 200 and 400 Big Lots stores along with two distribution centers. These stores will continue to carry the Big Lots banner going forward.

“The strategic sale to Gordon Brothers and the transfer to Variety Wholesalers is a favorable and significant achievement for Big Lots,” Big Lots’ president and CEO said in a statement.

“This sale agreement and transfer provides the strongest opportunity to preserve jobs, maximize value for the property and ensure the continuity of the Big Lots brand,” he continued.

This agreement is subject to bankruptcy court approval and other customary closing conditions.

Variety wholesalers

Currently, Variety operates approximately 400 stores in the Southeast and Mid-Atlantic regions. It is primarily known for its Roses Discount Stores and Roses Express stores, but also operates Bargain Town, Super 10, Bill’s Dollar Stores and Maxway.

At this time, Variety has not specified which stores will remain open, but it can be assumed that they will be located in the regions where it is already playing.

Variety also plans to retain current employees at the stores, which will remain open, as well as bring on some key corporate employees to keep their Big Lots operations going. Currently, Big Lots has about 27,000 employees, but the number that will transfer to Variety has not been determined.

Given Variety’s offering position, it seems the Big Lots brand has found a suitable home.

“We are pleased to reach this strategic agreement with Big Lots and partner with Variety Wholesalers to achieve a path forward that allows Big Lots to continue serving customers with extreme deals and an exceptional shopping experience,” said Rick Edwards , Gordon Brothers head of North. USA retail. His company also handles the liquidation of the 700 Party City locations.

With this announcement, Variety President and CEO Lisa Seigies practically doubles her span of control. She has been with the company for six years, rising to the top after serving as the company’s chief merchandising officer.

She started in retail at Federated, now Macy’s, and also worked with Martha Stewart Living Omnimedia, Ross Stores and Stage Stores, among others.

Leftovers of large batches

In his latest results report for the first quarter ended May 4, it reported a 10% decline to $1 billion and a net loss of $205 million. It ended its last fiscal year down 14% to $4.7 billion after closing 500 stores in bankruptcy in September.

At the end of the first quarter, it had $950 million in inventory, $4 million in cash, and $574 million in long-term debt.

Instead of reporting earnings for the second quarter, it instead filed for bankruptcy. At the time, it listed assets and liabilities in the range of $1 billion to $10 billion and named between 5,001 and 10,000 debtor creditors, according to Looking for Alpha.

Hopefully Gordon Brothers has another buyer or two up its sleeve to save more of the Big Lots brand, but it got a good head start.

“At least this gives Big Lots a chance to survive in some form. Although a lot of changes will be needed to optimize a proposal that was frankly well below pre-bankruptcy levels,” concluded GlobalData’s Saunders .