Discount retailer Big Lots increased its borrowing capacity by up to $200 million with a new first in, last out term loan facility through 1903P Loan Agent, an affiliate of Gordon Brothers Capital. The FILO term loan facility enhances Big Lots’ liquidity position and is incremental to the borrowing capacity within the company’s current $900 million asset-based revolving loan facility.
Big Lots reported sequential improvement in its results during 2023 and, as reported on its March 7 earnings call, expects further improvements during 2024. On its March 7 earnings call, Big Lots also indicated that it was continuing to evaluate additional actions to bolster its liquidity.
“We remain fully committed to improving our results and returning the company to health and prosperity,” Jonathan Ramsden, chief financial and administrative officer of Big Lots, said. “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,” including owning bargains and closeouts and communicating value. The company 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 said it is 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.
Citigroup Global Markets acted as the exclusive financial advisor to Big Lots on the FILO term loan facility. PNC Bank remains the company’s ABL lead.
