Furniture Retailer Big Lots Works With Adviser for Operational Help

Furniture retailer Big Lots Stores Inc. is working with AlixPartners LLP for operational help as the company looks to tackle costs amid shrinking revenue, according to people familiar with the situation.

(Bloomberg) — Furniture retailer Big Lots Stores Inc. is working with AlixPartners LLP for operational help as the company looks to tackle costs amid shrinking revenue, according to people familiar with the situation. 

Big Lots has endured an earnings slump as buying habits of its lower-income consumers have been crimped by higher interest rates and inflationary pressure, coupled with supply chain issues. Comparable sales swooned 18.2% in the first-quarter that ended April 29. 

“As well as benefiting from the cost reductions referenced in our earnings call, our liquidity position is being strengthened by aggressive inventory management, asset monetization efforts, and availability under our $900 million asset-based lending facility,” a company spokesperson said in an emailed response. 

A representative with AlixPartners declined to comment.  

To offset the earnings decline, the company has identified more than $100 million in structural selling, general and administrative (SG&A) expenses for 2023 and additional $200 million across gross margin and SG&A costs to be realized in 2024 with the help of an “external party,” Big Lots Chief Executive Officer Bruce Thorn said in an earnings call held in May.  

On the call, Big Lots refrained from providing full-year guidance due to “significant uncertainties.”

The home decor purveyor is also dealing with the fallout from the abrupt closing of its largest vendor United Furniture Industries Inc. in November that led to product shortages. Net sales in the first-quarter declined 18.3% year-over-year to around $1.124 billion, according to regulatory filings. 

At first-quarter end, the retailer had net available liquidity of $328 million, after accounting for covenant limitations under its asset-based revolver, according to management comments on its earnings call. 

To safeguard its liquidity, the company inked a sale and leaseback deal for a distribution center and 26 owned stores with affiliates of Blue Owl Capital in July for gross proceeds of $318 million. 

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