Adapting to Uncertainty. Inflation Cools, Hooker Cuts Costs, and Big Lots Files

Originally published September 11, 2024. This version was rebuilt from the BLS consumer price index, Hooker Furnishings' second-quarter release and Big Lots' Chapter 11 announcement for the FIN archive, and the facts are as of that date.

Mid-September 2024 brought cooler inflation, cost cutting at a long-established furniture maker and a Chapter 11 filing by one of the biggest discount sellers of home goods.

The short version

• BLS said consumer prices rose 2.5% over the 12 months to August.
• Hooker said it expects 10% savings in fixed costs, a $10 million reduction.
• Big Lots agreed to sell substantially all its assets to a Nexus Capital affiliate and filed Chapter 11.

Economic pressures ease

BLS said the all items index rose 2.5% for the 12 months ending August, the smallest 12-month increase since February 2021.

The household furnishings and operations index fell 0.3% in August and was 0.6% lower than a year earlier. Falling furniture prices helped shoppers but put pressure on retailer and maker margins.

Hooker Furnishings' quarter

Hooker reported second-quarter consolidated net sales of $95.1 million, down 2.8%, which it attributed to ongoing sluggish demand in home furnishings retail.

The company said it expects to realize 10% savings in fixed costs starting in the second half of its fiscal year, a $10 million reduction, with about $5 million by year end. Steps included reducing its Savannah warehouse footprint and consolidating operations.

Big Lots files for Chapter 11

On September 9 Big Lots said an affiliate of Nexus Capital Management had agreed to acquire substantially all of its assets and that it had started voluntary Chapter 11 proceedings in Delaware. It secured commitments for $707.5 million of financing.

Big Lots said it would keep serving customers in stores and online while it optimized its store footprint.

Update. The court approved the Nexus sale in November, but in December Big Lots said it no longer expected it to close, and Gordon Brothers completed a purchase in January 2025.

Stay informed

Cooler inflation helped consumers, but falling furniture prices, cost cuts and a major bankruptcy showed how much pressure the industry was under in late summer 2024.

Related on FIN

• Furniture Sales Rose. Costs Are Rising Faster.
• Every Door in Town

Sources

• U.S. Bureau of Labor Statistics, Consumer Price Index, August 2024
• Hooker Furnishings, Second quarter fiscal 2025 results (Sept. 5, 2024)
• Big Lots, Inc., Sale agreement with Nexus Capital Management (Sept. 9, 2024)
• Big Lots, Inc., Big Lots receives court approval for sale to Nexus (Nov. 22, 2024)
• Big Lots, Inc., Update on court-supervised process (Dec. 19, 2024)
• Gordon Brothers, Completes Big Lots purchase (Jan. 2025)