The retail sector would like to forget about 2024 as the year winds down, as several retailers have filed for bankruptcy and many have liquidated and closed their businesses.
Bankrupt discount home goods chain Big Lots shocked the retail world as it revealed it will begin going-out-of-business sales at all remaining store locations in the coming days after a proposed sale agreement with stalking-horse bidder Nexus Capital Management collapsed, the company said in a Dec. 19 statement.
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The company asserted that it doesn't expect to complete a previously announced asset purchase agreement with Nexus but will continue seeking an alternative going concern transaction with Nexus or another party.
Related: Popular bankrupt retail chain closes after potential sale dies
Big Lots said it aims to complete a Section 363 bankruptcy sale by early January, and it believes the liquidation sales do not preclude it from completing a going concern transaction.
The company said it will continue serving customers in-store and online as the liquidation approaches.
Big Lots filed for Chapter 11 protection on Sept. 9 in the U.S. Bankruptcy Court for the District of Delaware seeking to sell its assets to stalking-horse bidder Nexus Capital Management for a $760 million bid, which included $2.5 million in cash, debt payoff, and assumption of liabilities.
Discount retailer 99 Cents Only was another popular chain that filed for Chapter 11 bankruptcy on April 8, 2024, liquidated and closed down all 371 locations in Arizona, California, Nevada, and Texas.
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Home goods chain The Container Store is facing a potential bankruptcy filing as Beyond (BYON), which owns online retailers Overstock, Bed Bath & Beyond, Baby & Beyond, and Zulily, on Nov. 20 said that it had concerns about a proposed $40 million investment in the retail chain after the home goods retailer had not been able to secure additional financing acceptable to Beyond.
The Midvale, Utah-based online retail owner on Oct. 15, 2024, reached a $40 million securities purchase agreement with The Container Store Group Inc. that required the home goods retailer to secure new financing on terms commercially acceptable to Beyond as a condition to closing.
Beyond has the right to determine in its sole discretion the adequacy of The Container Store's financing arrangements, under the agreement.
And finally, reports in mid-December claimed that the parent company of giant party supply retailer Party City was considering a Chapter 11 filing. The filing came early Dec. 21 at U.S. Bankruptcy Court for the Southern District of Texas.
The filing was Party City's second in two years, Reuters said.
Related: Another major trucking company files for Chapter 11 bankruptcy
Party City Holdco, which operates about some 700 party supply and costume stores in the U.S., Canada, and Mexico, reportedly was behind on rent for some of its stores, was running out of cash, and lagging sales were making it difficult for the company to make payments on its large debt load.
The bankruptcy filing listed both assets and liabilities in the range of $1 billion to $10 billion. The company estimated it has more than 10,000 creditors.
Image source: Shutterstock
Party City going out of business
Party City's operations came crashing down on Dec. 20, as the company's CEO Barry Litwin told corporate employees in a video conference meeting that the party supply chain was winding down operations immediately and that it was their last day of employment, CNN reported.
More bankruptcy stories:
- Another popular pizza chain files for Chapter 11 bankruptcy
- Popular vodka brand files for Chapter 11 bankruptcy
- Auto parts retailer dumps hundreds of stores, no bankruptcy yet
Employees were told they would not receive severance pay and their benefits would end as the company goes out of business.
Some employees received letters stating that the company would close stores on Feb. 28, at which time store staff would be terminated.
Party City previously filed for Chapter 11 protection on Jan. 17, 2023, suffering from the effects of the Covid-19 pandemic which forced the closure of its stores and impacted its supply chain.
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