Retailer Big Lots Inc. Thursday said it plans to close about 85 close-out merchandise stores and 41 furniture stores, leading to pretax charges of about $60 million, or 35 cents per share.
Big Lots also said it would spend up to $28 million, or 15 cents a share, to mark down merchandise in an attempt to reduce inventory.
The company said its past earnings guidance should no longer be relied upon given the many changes it is undertaking, and that it has discontinued giving earnings guidance until it can quantify more facts or assumptions.
The latest store closings are in addition to the 40 stores Big Lots already planned to close this year.
Big Lots also reported September same-store sales rose 2.9 percent. Total sales in the five weeks ended Oct. 1 rose 7.7 percent to $385.3 million.
The company said it is reviewing its overall cost structure and expects to outline its findings and potential expense-savings opportunities in November.
Big Lots operates 1,536 stores in 47 states under the Big Lots and Big Lots Furniture names and expects to end fiscal 2005 with about 1,400 stores. The company plans to open fewer new stores than originally planned for the rest of 2005 and said net new store growth in 2006 should be minimal.
Big Lots estimated that lost sales from stores closed due to Hurricanes Katrina and Rita were offset by the pre-hurricane preparation sales in the days just before the storms.
As of Oct. 5, Big Lots had seven stores closed due to Hurricane Katrina and three closed due to Hurricane Rita. Four of the 10 closed stores should reopen in the next several weeks and six stores could be a total loss or take up to several months to rebuild, Big Lots said.
