Big Lots, a well-known discount retailer, has filed for Chapter 11 bankruptcy protection. As part of its restructuring plan, the company has already started closing 295 stores, which it describes as “optimizing our store footprint.” Additionally, around 250 more locations are scheduled to shut down by January 15, 2025.

With 1,389 stores across 48 states—excluding Alaska and Hawaii—Big Lots, headquartered in Columbus, Ohio, has been operating since 1967.

Despite the closures, the retailer will continue to honor gift cards and store credit cards.

“While most of our stores are profitable, we are focusing on a more streamlined footprint to enhance efficiency and better serve our customers,” said Bruce Thorn, Big Lots President and CEO, in a press release. “We plan to use the resources available through this process to systematically optimize our store fleet.”

The bankruptcy follows a recent warning from the company in a U.S. Securities & Exchange Commission (SEC) filing that it might close between 35 and 40 locations this year.

Big Lots has entered a sale agreement with Nexus Capital Management LP, which has submitted a “Stalking Horse Bid”—an initial offer that sets a baseline for other potential bids. If the auction receives no higher offers, the Stalking Horse Bid will likely prevail. Bids are due by October 15.

Court documents reveal that Big Lots holds nearly $3.1 billion in debt, owed to between 5,001 and 10,000 creditors, while its assets total $3.18 billion.

The company has been significantly impacted by recent macroeconomic challenges, including high inflation and interest rates, as well as shifts in consumer spending habits, with many customers delaying or cutting back on discretionary purchases.