Big Lots to Exit Canada; Q3 Loss Widens
COLUMBUS, Ohio-In the face of a larger third-quarter net loss, Big Lots said it will exit the Canadian market, where it currently operates 78 stores.
The retailer's net loss for the quarter, which ended on Nov. 2, was $9.5 million, compared to a net loss of $6 million from last year's third quarter. Net sales were up 1.6 percent to $1.2 billion, but same-store sales fell 2.5 percent.
Gross margin increased 40 basis points to 38.5 percent. Selling, general and administrative expenses rose 3.2 percent in dollars and 60 basis points as a percentage of sales, to 37 percent.
In its statement, Big Lots characterized the Canadian market as "unprofitable," and said it had decided to leave after "a detailed evaluation of our current operations and business prospects." Big Lots entered the Canadian market in 2011, when it acquired Liquidation World, a closeout-merchandise chain.
"Over the last two years, we have invested in this business, and our team in Canada has worked diligently to turn it around," Big Lots said. "However, we have not been able to gain the necessary traction in the Canadian marketplace that had originally been anticipated, and believe that the significant further capital investments and execution rise associated with continuing to pursue a turnaround would not be in the best interests of our company and shareholders."
The company said it would begin to wind down the Canadian business immediately, and that it expects that principal operations will cease in the first quarter of 2014.