(Ian Ritter is national online editor for GlobeSt.com/RETAIL.)
COLUMBUS, OH-Closeout retailer Big Lots plans to shut 85 money-losing broadline stores and all 41 of its stand-alone furniture units by January. Along with previously announced closures, the company will now close 165 to 170 stores by the end of its fiscal year in January.
The broadline stores, mostly in smaller-populated Midwest markets, are on track to lose $9 million and account for 4% of the sales at its 1,500 closeout stores. Executives decided to close the units after a portfolio-wide review in which they found "a growing number of marginally performing stores in weaker or less densely populated markets." After a similar review last year, executives decided to close 40 units this year.
Big Lots executives have decided to close its furniture stores because those units have also lost money. Furniture transactions in broadline units account for 12% of the company's total sales, but furniture-store sales accounted for less than 1% of revenues.
Ten Big Lots stores remain closed due to hurricanes Katrina and Rita. Of those, four are expected to open in the next few weeks and six units might be lost or would take several months to rebuild.
Big Lots' September sales increased 7.7% from the same period last year, to $385.3 million, and same-store sales rose 2.9%. But the number of customer transactions fell 1.6% for the month and 2.9% for the quarter-to-date period.
A Wachovia Securities report released at the beginning of the week predicted that Big Lots' same-store sales last month would end up in the range between a 1% drop and 1% increase. "We see downside risk given the rapid increase in gas prices," the report says. "We continue to believe [Big Lots] is struggling to generate customer traffic."
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