Big Lots reached an agreement to sell its assets, including its intellectual property, to real estate consulting firm Gordon Brothers Retail Partners just before the end of 2024. The transaction would also include the sale of between 200 and 400 stores to Variety Wholesalers, Big Lots announced Dec. 27.
The deal comes three months after Big Lots filed for Chapter 11 bankruptcy and weeks after it started a going-out-of-business sale and said all of its more than 1,300 stores would close.
"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 to serve customers,” Gordon Brothers Retail Partners' Head of North America Retail Rick Edwards said in a statement.
Variety Wholesalers plans to continue operating the stores it acquires under the Big Lots banner. The retail conglomerate could also acquire two distribution centers as part of the deal.
Under the deal, new ownership could continue to employ existing staff, but doing so is not required. Variety Wholesalers operates more than 400 stores on the East Coast, with brands like Roses, Maxway, Bill’s Dollar Stores, Super 10 and Bargain Town.
Big Lots filed for bankruptcy protection in a Delaware court on Sept. 9, claiming liabilities and assets between $1B and $10B and commitments for $707M, including $35M in new financing.
Investment firm Nexus Capital Management entered a $620M stalking horse agreement at the time to acquire and continue operating all of Big Lots assets at a bankruptcy auction, but the deal collapsed in early December.
Gordon Brothers is a private retail investment firm based in Boston and best known for its $88M joint venture to acquire Polaroid in 2009, which it sold in 2017.
It wasn’t alone in looking to pick up the discount retailer. Mitch Modell, the founder of the eponymous big-box sporting goods retailer, was trying to raise $1B from investors to acquire Big Lots and Party City, which said it was going out of business on Dec. 20.
Modell’s Sporting Goods filed for bankruptcy protection in 2020, and the brand was sold to a pair of investors that includes Tai Lopez, who is infamous on the internet for a commercial he filmed in his garage to promote his finance course.
Modell told the New York Post he had been in contact with representatives for Gordon Brothers to express his interest in joining the deal, but at least one adviser is skeptical he’ll be successful.
“I think it’s too late for Big Lots,” the source told the Post. “Mitch started very late and he needs time to raise cash.”
In comments included with the sale announcement, Big Lots CEO Bruce Thorn said the deal presented by Gordon Brothers was the company’s best opportunity to preserve its legacy. The deal still needs approval from the bankruptcy court.
“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,” he said. “We are grateful to our associates nationwide for their grit and resilience throughout this process."
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