Big Lots In Canada Now
Big Lots Inc. (NYSE:BIG) began its Canadian operations with 89 stores and 1000 committed associates as the company recently announced the completion of the Liquidation World Inc. acquisition.
For its first overseas outpost, Big Lots paid $20 million in cash apart from acquiring certain liabilities and fulfilling the company’s debt obligations. The company acquired all outstanding shares of Liquidation World and gained all the assets and leasehold rights.
Big Lots has been exploring numerous options for more than two years for entering the Canadian turf and is expecting the acquisition to be accretive to its top line in the coming years, while generating long-term growth prospects for the company.
The company remains focused to enhance its store operations capacity, while escalating its manpower. Going with this strategy, Big Lots announced two executive level appointments for gratifying the hard work of its employees. Joe R. Cooper was appointed as the president of Big Lots Canada, while Timothy A. Johnson was promoted as the Senior Vice President of Finance as well as appointed to the company’s Executive Committee.
Based in Columbus, Ohio, Big Lots procures branded merchandise at lower costs from vendors, who have excess inventory and resort to a fire sale of their goods, or have higher sales returns or discontinued products. Further, the company’s closeout format provides it with an edge over traditional discount retailers as it offers merchandise assortments to customers at cheaper rates.
However, Big Lots operates in a highly competitive discount retail business, which might result in loss of market share, fall in sales and operating margins. The competitors having larger number of stores, greater market presence, and financial resources will continue to weigh on the company’s results.
Currently, we have a long-term ‘Neutral’ rating on the stock. Moreover, Big Lots, which competes with Target Corporation (NYSE:TGT), holds a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating.