Big Lots has increased its borrowing capacity by securing up to $200 million in a term loan facility.
The retailer said in a Thursday announcement that the new first-in, last-out term loan facility, which it took out through an affiliate of Gordon Brothers Capital, significantly improves the company’s liquidity position. It is in addition to the company’s borrowing capacity under an existing $900 million asset-based loan.
Big Lots immediately drew down $50 million in borrowings under the new loan, which matures in 2027. In an 8-K regulatory filing with the U.S. Securities and Exchange Commission, the retailer said the loan is secured by a first-priority mortgage on the company’s corporate headquarters in Columbus, Ohio, and it’s also secured by two separate liens on most all of Big Lots’ working capital assets and personal property assets, including credit card receivables, inventory, fixtures and machinery.
“We remain fully committed to improving our results and returning the company to health and prosperity," Jonathan Ramsden, Big Lots’ chief financial and administrative officer, said in a statement. “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.”
Those key actions include positioning Big Lots to focus on 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 in the furniture, decor and pantry essentials sectors.
During its most recent earnings call, Big Lots said it cut selling, general and administrative expenses by over $140 million last year, reduced capital expenditures by almost 60% year over year and reduced its inventory by nearly $200 million. Executives said at the time that the company was evaluating additional actions to bolster its liquidity.
The company’s C-suite also saw a change last month with the departure of Chief Merchandising Officer Margarita Giannantonio, who left the company on March 19. Giannantonio, who joined Big Lots in 2022, and the company agreed to a mutual separation due to personal reasons, according to a regulatory filing. Big Lots said Giannantonio’s exit is being treated as a termination without cause for purposes of the company’s severance plan.
Big Lots said it does not plan to fill the chief merchandising officer role. Instead, Kevin Kuehl and Shelly Trosclair, who are senior vice presidents responsible for several merchandising divisions, will report directly to CEO Bruce Thorn.
