Acquisition Takes Big Lots into Canada
Home & Textiles Today Staff -- Home Textiles Today, June 9, 2011
COLUMBUS, OHIO - Big Lots, with more than 1,400 stores in 48 states, will enter Canada through the acquisition of Liquidation World, a close-outer with 92 units.
"Their home business is a big opportunity," Big Lots chairman and ceo Steve Fishman told analysts after the announcement. "We think there are some good [home] retailers up there, but it's still under-penetrated."
He pointed to seasonal, toys and furniture as other small businesses for Liquidation World that Big Lots could help leverage.
One-third of Liquidation World's stores are under 20,000 square feet; one-third range from 20,000-25,000 square feet; and the first third run from 25,000 square feet. to more than 30,000 square feet, Big Lots executives said.
Fishman characterized the markets as "being similar to a more traditional, older Big Lots," adding the company will evaluate which markets offer the more potential for expansion.
The deal, pending approval by the Canadian chain's shareholders, will include an initial investment of approximately $36.7 million (U.S.), including settling Liquidation World's debt and setting up working capital for the business.
Fishman said the deal would create opportunities for both retailers' vendors to expand their business. One analyst noted Liquidation World has been running negative EBIDTA for several years and asked what Big Lots will bring to the table to turn the business around.
"We can help with the content of [Liquidation World's] inventory and access to a vendor base that they have not had had trouble getting to," said Fishman.
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