Big Lots on Monday moved to strengthen its global product sourcing model.
The discount retailer said that it opened two new buying offices in Asia. Located in Ho Chi Minh City, Vietnam, and Shanghai, the company says the new offices should enhance its competitive advantage in sourcing products, including closeout deals and extreme bargains.
“Global sourcing is key to our ability to add newness and expanded assortment at extreme value prices for our shoppers," CEO Bruce Thorn said in a statement. “Today's announcement positions us for even greater success in a changing global marketplace as we create more extreme bargains and everyday great values for our customers.”
Kevin Kuehl, the company’s senior vice president and general merchandising manager, will lead the new offices from the corporate headquarters in Ohio. Kuehl said in the announcement that the company’s buyers will be situated in Asia near significant manufacturing facilities and vendor partners.
Big Lots said the initiative will bring the company’s longtime, exclusive third-party agent’s sourcing team in-house, creating a stronger platform for overseas procurement and asset optimization while helping the retailer reclaim what it describes as its “bargain heritage.” The new buying offices are also expected to generate “significant operational cost savings” during the company’s 2024 fiscal year.
As part of an ongoing turnaround plan, Big Lots said last month it decreased selling, general and administrative expenses by over $140 million for the year, reduced capital expenditures by nearly 60% year over year and reduced inventory by nearly $200 million. However, Big Lots still ended the year with a net loss of nearly $482 million.
During an earnings call last month, Thorn said the company’s extreme value sourcing team is working alongside the merchandising team to integrate new procurement channels. This setup will allow Big Lots to directly source new deals without intermediaries.
Another goal with opening offices in Asia is to help Big Lots expand its sourcing network for key categories like furniture, seasonal items and soft home goods to developing markets in Central and South America and Africa.
“As we continue to build out our extreme value sourcing team, institutionalize new processes and flex our open to buy, we are quickly expanding our relationship with vendors, both new and existing, and reclaiming our seat at the extreme value table,” Thorn said according to a call transcript.
Big Lots in February closed a deal to buy toy company Hearthsong’s full inventory valued at $22 million. Through the deal, Big Lots acquired over 500 new SKUs, including indoor and outdoor toys, games and other items. The discount retailer said in February that it expected to start offering Hearthsong products this month at 50% to 70% off.
