Ollie’s Bargain Outlet Expands Footprint with Acquisition of Big Lots Store Leases Amid Bankruptcy Proceedings

Ollie’s Bargain Outlet is strategically expanding its retail presence by acquiring 40 store leases from Big Lots, which is currently navigating the complexities of Chapter 11 bankruptcy. The acquisition, announced on February 27th by Ollie’s Bargain Outlet Holdings, Inc., involves a deal with Gordon Brothers, a liquidation firm overseeing the sale of Big Lots locations. It’s important to note that this agreement is contingent upon final approval from the bankruptcy court and adherence to customary closing conditions.

This latest transaction brings Ollie’s total acquisition of former Big Lots leases to an impressive 63, demonstrating the company’s opportunistic approach to growth in a challenging retail landscape.

"We are excited to announce the acquisition of an additional 40 former Big Lot store locations," stated Eric van der Valk, president and CEO of Ollie’s, in a press release. He emphasized the strategic alignment of these locations with Ollie’s overall business model, highlighting their suitable size, favorable lease terms, proximity to existing markets, and established history of serving value-conscious consumers.

Both Ollie’s and Gordon Brothers were contacted for further comment but had not provided a response at the time of reporting.

The acquisition of these Big Lots store leases is expected to significantly impact Ollie’s expansion plans for 2025. Van der Valk indicated that the company will adjust its planned new store openings to prioritize the integration of the acquired locations, aiming for optimal operational and financial outcomes.

Currently, Ollie’s operates 568 stores across 31 U.S. states. The company’s website lists plans for new store openings in March across multiple states, including Wisconsin, Vermont, Connecticut, Ohio, Michigan, Oklahoma, and Indiana.

As a result of this transaction, Ollie’s now anticipates opening approximately 75 new store locations in 2025, further solidifying its position in the discount retail sector.

Gordon Brothers had been offering more than 600 Big Lots leases for sale nationwide. These stores were primarily situated in shopping centers across 47 U.S. states, with sizes ranging from 18,963 to 58,433 square feet. The deadline for submitting offers for individual and multiple locations was February 17th.

Big Lots’ bankruptcy filing in September marked a significant event in the retail industry. At the beginning of 2024, the chain held the position of the fourth-largest home goods retailer in the U.S., boasting a network of 1,392 stores. However, that number has since dwindled to 366 stores nationwide, according to the company’s website. Pennsylvania (32) and North Carolina (49) currently have the highest concentration of remaining Big Lots locations.

In a related development last month, Gordon Brothers submitted a filing to the U.S. Bankruptcy Court for the District of Delaware, identifying 200 Big Lots locations with leases or contracts designated for takeover by Variety Wholesalers, a retail company based in Henderson, North Carolina.

Back in December, Variety Wholesalers, Inc. announced its intention to acquire 200 to 400 Big Lots stores through an agreement with Gordon Brothers Retail Partners. Variety Wholesalers operates over 400 stores in the Mid-Atlantic and Southeast regions under various banners, including Roses Discount stores, Roses Express, Maxway, Bills Dollar Stores, and Bargain Town.

The situation for Big Lots has been further complicated by ongoing "going out of business" sales at its remaining locations. These sales, which commenced in December, feature substantial discounts ranging from 50% to 80% on items throughout the entire store.

According to the company’s CEO, Bruce Thorn, the purpose of these sales was to "protect the value of (Big Lots’) estate." Thorn had previously indicated that the closures could be reversed if a company sale was successfully completed. However, it appears that a complete liquidation of Big Lots’ remaining assets is now the likely outcome.

"We all have worked extremely hard and have taken every step to complete a going concern sale. While we remain hopeful that we can close an alternative going concern transaction, in order to protect the value of the Big Lots estate, we have made the difficult decision to begin the GOB process," Thorn said in December.

This acquisition by Ollie’s Bargain Outlet represents a strategic move to capitalize on opportunities arising from the restructuring of the retail landscape. By acquiring these leases, Ollie’s is poised to expand its reach and cater to the growing demand for value-priced merchandise. The move also underscores the ongoing challenges faced by traditional brick-and-mortar retailers in an increasingly competitive market. While Big Lots struggles to navigate its bankruptcy proceedings, Ollie’s is positioning itself for future growth and success. The future of the acquired Big Lots locations and their impact on local communities remains to be seen, but Ollie’s acquisition signals a significant shift in the retail landscape.