Did you know that, once, Sol Shenk purchased the entire remaining inventory of the DeLorean Motor Company after its 1982 collapse?

​

Sol Shenk founded Big Lots in Columbus, Ohio on the basis of a simple closeout idea, he had this genius idea that he would buy up merchandise from production overruns and bankrupt companies at fire-sale prices, and then resell those goods at deep discounts.

​

Originally operating as Consolidated Stores Corporation, Shenk’s venture started with discounted auto parts and quickly expanded. By 1982, Consolidated Stores opened its first Odd Lots closeout store,
​
The concept was an instant hit, consumers loved the treasure-hunt experience of finding brand-name products at bargain-bin prices.
Throughout the 1980s and 90s, the company grew by acquiring regional closeout chains like Mac Frugal’s and Pic ‘N’ Save. All of these acquisitions shared a common formula: big deals on odd assortments of goods.​
​

The catch was a nostalgic loyalty among shoppers, who never knew what they might find on a Big Lots trip.

Perceived Value Proposition:

• Big Lots built its brand around the idea of a dynamic, low-cost shopping experience, where customers enjoyed the thrill of never knowing what they’d find from brandname snacks to deeply discounted furniture.
  ​
• The company specialised in acquiring surplus inventory, overstock goods, and liquidation deals from well-known brands and reselling them at significant markdowns.

Quirky Marketing Campaigns created Brand Recall:

• “Savvy not Sleazy”: Perhaps the most famous early campaign came in 2001, when the newly unified Big Lots brand launched a national advertising blitz to shed the “dusty backroom” image of closeout stores.

Did you know that the company poured $27 million into the campaign, to hire veteran comedian Jerry Van Dyke, this was more than double its usual budget?

• “Be a BIGionaire”: In 2021, the company rolled out its “Be a BIGionaire” campaign, it was a cheeky series of ads suggesting that scoring bargains at Big Lots makes anyone feel like a millionaire. The holiday season that year saw Saturday Night Live alum Molly Shannon and Modern Family star Eric Stonestreet appear in festive Big Lots commercials as over-the-top “BIGionaires,” enjoying their savings.

Financial Success, but Started Spreading too thin:

• 1985 – Consolidated Stores Corp., the predecessor to Big Lots went public on the NYSE, raising $33.4 million in its IPO.
  ​
• 1994: The mid-90s were boom years. Big Lots was named one of the top ten most profitable retail chains in the U.S. in 1994.
  ​
• 1996: Riding high, the company made a bold move into toys, purchasing the Kay-Bee Toys chain for $315 million

Cracks started to show up:

• 1996: The timing was poor; the toy market was over-saturated and this acquisition of Kay-Bae Toys would later be sold at a loss.
• 2001: In a major rebranding, Consolidated Stores officially changed its name to Big Lots, Inc. and converted all Odd Lots, Pic ‘N’ Save, and Mac Frugal’s stores under the single Big Lots banner.
• Though the company was operating 1300 stores and $3.4 Billion revenue, the rebranding involved spending more than $30 Million and that was a very costly step.
• Through the 2000s and 2010s, Big Lots remained a steady player in discount retail, Annual sales stayed around $5.2–$5.3 billion for much of the late 2010s.
• 2010-2020 : Though the company remained stable in the revenue, the competition kept on intensifying.
• 2021: Following pandemic, Big Lots Sales dipped in 2021 and sinked 13.6% by 2023, leading to a $482M loss

​

Did you know that Big Lots once experimented with a pet-friendly store format, encouraging customers to bring their dogs while shopping?

3 Major Triggers of Brand Failure:

1. Losing the Price Edge: Clients noted that many items Big Lots sells can be found as cheap or cheaper at Walmart or Target.
   ​
2. Identity Crisis – The stores got brighter and more orderly over the years, Ironically, making stores nicer made customers feel less like a true closeout store shopping experience.
   ​
3. Betting on the Wrong Products: Management shifted floor space into furniture galleries and even acquired the rights to the Broyhill furniture brand, But Unfortunately, this happened just as the furniture market entered a slump.

5 Lessons for Startups from Big Lots’s $5.3 Billion Failure:

1. Never Abandon Your Core Value Proposition: Big Lots thrived for decades because it owned a specific niche, extreme value on closeout goods. Its mistake was losing that focus. When Big Lots no longer had the best deals or a distinctly fun bargain-hunting experience, customers lost interest.
   ​If your brand stands for something, double down on it.
   ​
2. Be Cautious with Debt and Expansion: Big Lots overextended itself by opening stores on an assumption of endless growth. It took on loans to fund expansion and then couldn’t generate the sales to justify those costs.
   ​Expansion should be driven by proven demand and positive unit economics, not hubris.
   ​
3. Adapt Quickly to Market Shifts: The retail landscape and consumer behavior can change, winners are those who pivot quickly. Big Lots did enjoy a surge in 2020 when consumers were resting at home. But it failed to adjust when that demand receded,
   ​Keep a pulse on your customers and be willing to pivot when you see new trends emerge.
   ​
4. Know Your Competition: Big Lots found itself crushed between retail giants and niche players. Walmart and Target could undercut some of Big Lots’ prices while offering nicer stores, and dollar stores and outlets offered a more compelling treasure-hunt thrill.
   ​Startups should avoid the “middle of the road” trap; pick an edge and lead on it.
   ​
5. Focus on Your Core Customers: During its rebranding, Big Lots tried to attract a more premium shopper who doesn’t necessarily need a bargain, and that backfired like crazy, the brand’s old loyal base felt alienated by such moves and slowly moved to different options. Engage with your customers, understand their needs deeply, and reward their loyalty.