Big Lots Makes Big Money -- and Big Plans

(MoneyWatch)  Closeout retailer Big Lots (BIG) is giving shopping center owners something to cheer about. While other major chains are closing their doors or cutting back expansion plans, Big Lots is going strong.

In 2010, the company plans to open 80 new stores (and close 40), a significant increase from the 52 it opened last year. Many of the new locations will be in higher-income areas, said Joe Cooper, the company's chief financial officer, during its fourth- quarter conference call. "These stores are the best investments we can make with our cash," he said. Management is looking to have 1,500 total locations by 2012, up from its 1,360 now. Dreaming big, they think they could reach 2,200.

The rush for growth is significant because over the past few years, Big Lots has concentrated more on shrinking its square footage. From 2005 to 2008, the company closed more stores than it opened.But the retailer is feeling frisky, due to its strong sales and earnings.

Sales at stores open at least a year rose 5.1 percent in the fourth quarter, and operating profit rose 30 percent, to $173.5 million. The chain outperformed two of its peers, Costco Wholesales (COST) and BJ's Wholesale (BJ), both strong performers during the recession. Big Lots hasn't experienced an annual same-store sales drop since at least 2001.

Big Lots isn't the only closeout retailer finding success in hard times. TJX Cos. (TJX), the owner of clothing chains Marshalls and T.J. Maxx, also has impressive sales and major growth plans. The retail landscape is changing, and with its transformation, consumers could have more choices than ever to buy inexpensive goods.