Big Lots Sells Stores, Distribution Center

Big Lots has reached an agreement with affiliates of Blue Owl Capital for the sale and leaseback of the retailer’s Apple Valley, Calif. distribution center and 26 owned store locations. 

The transaction is scheduled to close within 45 days, subject to continued due diligence, final documentation, and other customary closing conditions. Gross proceeds from the transaction are expected to be $318 million. Net of expenses and taxes, the company expects to receive estimated net proceeds of approximately $310 million.

“As we discussed on our Q1 earnings call, we are highly focused on ensuring we have plenty of liquidity to get through this period of macroeconomic challenges, and monetizing these assets is a significant step forward in ensuring such liquidity,” said Bruce Thorn, president and CEO of Big Lots. “Blue Owl has been a good partner on our other regional distribution centers, which we sold and leased back in 2020, and we look forward to furthering our relationship through this transaction." 

Officials with the retailer said the company intends to use $100 million of the net proceeds from the sale and leaseback transaction to fully pay down its synthetic lease on the Apple Valley distribution center, and to use the remainder of the net proceeds to pay down debt on its asset-based lending revolving credit facility.

The announcement of the sale and leaseback agreement comes just weeks after Big Lots announced an 18.3% decrease in sales for the first quarter. Comparable store sales were down 18.2% and its net loss was $206.1 million.