Originally published at: Big Lots is bankrupt and selling itself to private equity - Boing Boing
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Big Lots! means a Big Bust-Out! for Nexus Capital Management.
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Normally, I hate it when some company sells out to a private equity firm. In this case…
ETA: I didn’t read the post before. I just did and I have to highlight this gem of corporate-speak that says absolutely nothing at all about anything:
And then this obvious lie:
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I can’t remember the last time I was at one of these stores
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If most of their stores are profitable, where are they losing their money?
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The only true Trash Palace standing these days might be Ollie’s. Maybe Rhode Island Job Lot if you live up that way.
I miss Building 19.
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Option one (not likely): a few stores lose a large amount of money exceeding the combine profit from the other stores. Like if they had 400 stores making $1000 each and one store losing a half million dollars. I consider this unlikely because it would be easy in a normal bankruptcy to just close the money losing stores and be done.
Option two: the stores mostly make a profit, but they have a centralized purchasing system for inventory (“hey! Someone is selling five containers of ugly chars for cheap! Buy them all to sell next week!”). The stores have an easy time being profitable because at least some of the inventory comes from another part of the business that is losing the money. If you remove that money losing centralized purchasing the stores lose a chunk of inventory and might no longer be profitable. In other words “the stores make money when we ignore the purchase cost of the ugly chairs”
Option three: sort of like two above but a little less sus. Some other central process loses money. Shipping items from wharehosues to the stores, or making payments on the executives yachts.
Option four (unlikely): the stores are profitable enough, but they have some past debit that weighs them down and makes the current income insufficient to service some past debits. Like maybe they bought out most/all the leases and own the properties the stores are on. This is unlikely because bankruptcy largely lets you stiff people you took out loans from, so chapter 11 should have been able to eliminate enough past debit to keep an otherwise profitable business running.
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Fuck Big Lots, I’m thrilled to see them disappear. I have been boycotting them for 2 years after a giant runaround where between two local stores, they declined/refused to see me a spe3cific piece of furniture. Both stores offered one inconsistent argument after another as to why they wouldn’t let me buy the damn thing from either location. I tried ordering the same piece from out of state for a delivery, and after 3 missed delivery dates I cancelled the damn order. Did I mention fuck Big Lots? I hope Guitar Center is the next to collapse.
-Edited for spelling
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Nope, I was at one just last year, and it was all “As Seen on TV” crap, stuff you can get cheaper online. Gone are the days of racks of mis-sewn garments, bins of bandanas marred by inter-bolt seams, stuff that fell off the back of a truck somewhere, and a glorious miscellany of just weird stuff.
Apparently the equivalent thing the local kids are into is a “Bin store.” I poked my head in one, and will not be going back. Plastic bins are set up and filled once a week with cheap stuff – returns, overstocks, broken or flawed – and as the sign on the wall says, the first day it’s $10/item, and by the end of the week it’s a dollar. Staffing seems to consist of one harried employee, or maybe just the owner, screaming at the kids to stop playing with the items, and keeping them out of the tarp-covered stuff being set up for the next week’s sales. Bad vibes, bad merch, and nothing I saw that was worth buying two days in from the last restock.
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Sic transit gloria mundi.
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Ok, we know how this script goes by now, they’re going to load the company up with debt they don’t expect to ever pay back. But I have to ask: since we all know how the script goes, why are people still willing to lend money to a recently-bankrupt-and-newly-PE-owned company?
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I hadn’t been into a Big Lots for 15 years. I bought a $3 universal remove that time. This last time I bought a very nice garden storage box. Super durable, for $80 instead of something like $300 at the HD.
Except it reeks of chicken ramen. It’s been out in the sun in the backyard for three years now and I can still open it and smell ramen. It was flat-packed, I put it together, it’s not like ramen was kept in the box before I bought it.
When I think of my Big Lots consumer experience, why does Big Lots think they’re going to be long-term successful? I doubt my experience is much different than most of their customers.
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I had that same experience with a set of their patio dining chairs. When I pitched 'em they still stank like certain shower curtains – massively in summer, and I couldn’t stand 'em even in winter. That was the last time I bought anything expensive there.
That said, their off-lots of amazing foreign mustards and jams and cheap spices kept me going in there, until those petered out a few years back, and the shelves started becoming emptier. This town’s not big enough for Trader Joe’s, so B/L was the next best thing, in a small way.
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The only things I buy from there are the stackable storage bins. I guess I’ll have to go get some more before the bankruptcy “sale” jacks up the prices.
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I love the corporate euphemism of “optimize our operational footprint, accelerate improvement in our performance, and deliver on our promise”. What does that even mean? Post-capitalism crap.
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Option 5, execs have been looting them for a while
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Because they are lying.
In areas outside of the city there are the occasional “salvage” centers. Some of them specialize in building items and others general goods. You can get some good deals if you need what they have. Occasionally items get orphaned and you’ll still see something like a DB25 parallel cable for $20. Sometimes you can find commercial / industrial items on the cheap, which is rather nice for cleaners and such.
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There’s also option 5: Technically, 51% is “most”. I can see 49% of stores losing more than what the other 51% make. (With a little more siphoned off as excessive executive pay and bonuses, yeah.)
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Exactly, this is how it’ll play out: They’ll emerge from bankruptcy in 1-3 years, then sell it off for parts and try to make as much money as they can rather than actually try to keep the company a profitable concern.
In the last 5-7 years, have any retails companies actually come back from bankruptcy? I found this article about some companies that came back from bankruptcy (thanks government bailouts!) but none are retail sales companies.
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