Big Lots Net Down; Agrees to Acquire Liquidation World
COLUMBUS, Ohio-A decline in both sales and gross margin dragged Big Lots' first-quarter net income down 6.1 percent to $52.5 million.
The closeout retailer also said it has swung a deal to acquire Canada-based Liquidation World, thus marking its first expansion outside of the United States.
Net sales for the first quarter, which ended on April 30, slipped 0.6 percent from last year's first quarter to $1.2 billion, including a decrease of 3.6 percent in same-store sales. Gross margin finished the quarter at 40.3 percent, down 30 basis points from last year. The company did slim down selling, general and administrative expenses by 1.4 percent in dollars, and by 30 basis points as a percentage of sales to 31.5 percent.
Big Lots will acquire all of Liquidation World's outstanding stock for about $1. 8 million, and said it estimated its initial investment would be about $36.8 million, which would include payment for the acquisition, satisfying Liquidation World's debt and normalizing the working capital needs of the business. Liquidation World operates 92 stores, offering a broad assortment of closeout merchandise.
Big Lots said it expects to close the transaction on July 31. As of the end of the first quarter, the retailer operated 1,405 stores in 48 states.