Big Lots Grows While Others Cut Back

Closeout retailer Big Lots is bucking some serious trends this year, both on a national and corporate level. While other big retailers are cutting back new stores or shedding their existing portfolios, the Columbus, Ohio-based company is doing the opposite. Not only that, management decided to undertake its first store-expansion program in five years.

Big Lots, which operates about 1,300 stores across the country, is opening 45 new units this year, next year and at least as many annually for the foreseeable future. By contrast, Target is cutting back its openings plans, and other chains like Starbucks are shutting doors after facing tough results in the recession.

But the recession seems to help Big Lots. During the company's fourth-quarter conference call, in March, Chuck Haubiel, senior vice president of legal and real estate, said that falling real estate values have actually make it an opportune time for Big Lots to expand.

Since 2004, rates were too expensive for the retailer to expand, Haubiel explained. The company was holding out, "with the belief that someday lease rates would subside and space will become available for us to grow again profitably, which is where we are today," he said.

This phenomenon is also allowing Big Lots to enter areas that were once too expensive, such as the Northeast, the Carolinas, Florida, California and the Pacific Northwest.

In financially tight times like these, Big Lots is popular with consumers looking for deals. But it appears that the retailer is getting its own deals from landlords as it expands once again.