December 6, 2013
Two years after getting into the Canadian market, Big Lots now plans to abandon it.
The Columbus-based closeout retailer said yesterday that while “we have invested in this business and our team in Canada has worked diligently to turn it around ... we have not been able to gain the necessary traction in the Canadian marketplace that had originally been anticipated.”
Continuing to pursue a turnaround “would not be in the best interests of our company and shareholders.” For the fourth quarter of fiscal 2013, Big Lots anticipates a loss from Canadian operations in the range of $38 million to $43 million. For the full year, Big Lots expects a loss from Canadian operations of $52 million to $57 million.
The news came after the stock market closed, as part of the company’s third-quarter earnings announcement.
Big Lots reported a loss of $9.5 million, or
17 cents a share, compared with a loss of nearly $6 million, or 10 cents a share, in the year-ago period. Analysts had expected earnings of
24 cents per share.
Sales rose slightly from a year ago, to $1.15 billion from $1.13 billion, but analysts had expected sales of $1.23 billion for the quarter.
The company’s shares were down more than
10 percent in after-hours trading.
In July 2011, Big Lots entered the Canadian market by buying the struggling Liquidation World business, investing $20 million in cash and assuming the debts of Liquidation World, which operated 92 stores.
At the time of the purchase, Big Lots officials said they hoped to expand the number of stores in the Canadian chain to at least 150 in the next few years.
Today in Canada, Big Lots operates 73 stores under the Liquidation World or LW brand names, five stores under the Big Lots brand name, two distribution centers and an office.
“We intend to begin an orderly wind-down process immediately and expect that principal operations will cease during the first quarter of fiscal 2014,” Big Lots said in a statement.
The Canadian acquisition was made when Big Lots was led by Steve Fishman, who retired as chairman, president and CEO in May.
Since Fishman’s retirement, his successor, retail veteran David Campisi, has rapidly instituted changes at Big Lots, including in the executive offices.