Ohio-based discount retailer Big Lots has filed for bankruptcy and plans to close more stores under new leadership, the company announced Monday.

The retailer said in July it planned to close 35 to 40 stores in a Securities and Exchange Commission filing, then the number rose to 315 in another filing in August.

The closures are part of a sale agreement with an affiliate of Nexus Capital Management LP, Big Lots announced in a news release Monday. The company has initiated Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware as well. 

Closing more locations will allow the company to have a “more focused footprint” and conduct business efficiently, said Bruce Thorn, president and chief executive of Big Lots, in a news release. The company will also work on its distribution center model.

"Though the majority of our store locations are profitable, we intend to move forward with a more focused footprint to ensure that we operate efficiently and are best positioned to serve our customers,” Thorn said in the news release. “To accomplish this, we intend to use the tools afforded by this process to continue optimizing our store fleet in an orderly manner."

Big Lots said in the news release it has focused on improving sales and profitability since the COVID-19 pandemic. Referring to factors such as high inflation and interest rates, the company said it has been hit by circumstances that are “beyond its control," like inflation and high interest rates, and have made it difficult for the company to carry on business as usual.

The company’s customer base has been more cautious about spending money on home and seasonal products that make up a large portion of the company’s revenue, the discount store said.

“While the company's underlying performance has been improving, the Board of Directors conducted a broad strategic review of alternatives and determined that entering into the Sale Agreement with Nexus, and initiating a court-supervised sale process, is the best path forward to maximize value and ensure continued operations,” Big Lots wrote in the release.

On Friday, Big Lots pushed back the release of its second quarter earnings to Thursday, Sept. 12. The company’s CEO did, however, announce Monday that Big Lots “achieved underlying comp sales, gross margin, and operating expenses in line with our guidance.”

Thorn said quarter three is “off to a good start” and the company anticipates an upswing in the company’s momentum for the latter half of the year.

Recent agreement for Big Lots includes over $700 million in financing

Big Lots said in its announcement Monday that Nexus will act as a “stalking horse bidder" in an auction the courts will oversee. Companies that want to place higher bids can participate but if Nexus is the winner, the sale should be final by the fourth quarter of 2024.

Big Lots also reported $707.5 million of financing, including $35 million from some of its current lenders.

Regarding its current operations, Big Lots has filed motions seeking court approval to continue paying employees and benefits, and payments to certain critical vendors in the ordinary course of business. 

Contributing: James Powel

Saleen Martin is a reporter on USA TODAY's NOW team. She is from Norfolk, Virginia – the 757. Follow her on Twitter at@SaleenMartin or email her at[email protected].