Big Lots has struck a last-minute deal that will save the retailer from liquidation.
The Columbus, Ohio-based closeout chain, which filed for Chapter 11 bankruptcy protection in September, on Friday said it had agreed to a sale transaction with Gordon Brothers Retail Partners that allows the transfer of Big Lots assets — including stores, distribution centers and intellectual property — to other retailers and companies. That group includes Henderson, North Carolina-based Variety Wholesalers, which owns more than 400 stores in the Southeast and mid-Atlantic under the Roses, Roses Express, Maxway, Bill's Dollar Stores, Super 10, Super Dollar, and Bargain Town names.
Variety Wholesalers intends to acquire between 200 and 400 Big Lots stores — operating them under the Big Lots brand — and up to two distribution centers, according to Big Lots. In addition, Variety Wholesalers may employ Big Lots associates at the acquired stores and distribution centers, as well as certain corporate associates needed to support the go-forward footprint.
"The strategic sale to Gordon Brothers and the transfer to Variety Wholesalers is a favorable and significant achievement for Big Lots that reflects the tireless work and collective effort of our team," Bruce Thorn, the chain's president and CEO, said in a statement. "This sale agreement and transfer present the strongest opportunity to preserve jobs, maximize value for the estate and ensure continuity of the Big Lots brand. We are grateful to our associates nationwide for their grit and resilience throughout this process."
Big Lots has been closing hundreds of stores, and in December said it would close the rest of its fleet after an earlier sale to a buyer fell through.
The agreement is subject to approval by the bankruptcy court and other customary closing conditions.
For the record
Davis Polk & Wardwell is serving as legal counsel, Guggenheim Securities is serving as financial adviser, AlixPartners is serving as restructuring adviser and A&G Real Estate Partners is serving as real estate adviser to the company.
Riemer & Braunstein acted as counsel to Gordon Brothers, and Gordon Brothers' Real Estate Services team will be handling real estate matters for the buyers, including Variety Wholesalers.
Cozen O'Connor is serving as legal counsel to Variety Wholesalers.