Big Lots Adds Borrowing Capacity
Big Lots has increased its borrowing capacity by up to $200 million with a new loan from the 1903P Loan Agent, LLC, an affiliate of Gordon Brothers Capital.
According to officials with the retailer, the “first in, last out” (FILO) loan will “significantly” enhance the company’s liquidity position and is incremental to the borrowing capacity within Big Lot’s current $900 million asset-based revolving loan facility (ABL).
"We remain fully committed to improving our results and returning the company to health and prosperity," said Jonathan Ramsden, chief financial and administrative officer of Big Lots. "The financing announced today gives us additional flexibility as we continue our focus on delivering extreme bargains and unmistakable value to our customers. We are confident that our five key actions will drive significant improvement in sales and gross margin in the coming quarters."
Big Lots has identified five key actions to reclaim its bargain heritage, which include owning bargains and closeouts and communicating unmistakable value. Through its extreme value sourcing, Big Lots said it is focused on becoming the premier partner for closeouts and liquidations, growing bargain offerings to 75% of sales, and creating an annual pipeline of closeout deals worth more than $1 billion at original retail value across furniture, décor, and pantry essentials.
The company continues to manage both capital and expenses and remains on track to realize at least $200 million in profitability improvements identified through its Project Springboard initiative. Project Springboard was launched in spring 2023 with an external consulting firm whose engagement is now substantially complete.
Recently, Big Lots opened international buying offices in Shanghai, China, and Ho Chi Minh City, Vietnam, in an effort to enhance the company's competitiveness in sourcing products, including closeout deals and extreme bargains.
The initiative is expected to yield significant operational cost savings beginning in fiscal year 2024 and will bring the company's long-time, exclusive third-party agent's sourcing team in-house as Big Lots' Asia sourcing team. The new international buying offices will also create a stronger platform for overseas procurement and assortment optimization, as part of Big Lots' strategy to reclaim its bargain heritage, the retailer said.
