Business Description
The Company is the nation's largest broadline closeout retailer. The Company's
goal is to build upon its leadership position in broadline closeout retailing
by expanding its market presence in both existing and new markets. The Company
believes that the combination of its strengths make it a low-cost value retailer
well-positioned for continued growth. The Company's Web site is located at www.biglots.com.
Wholesale operations are conducted through Big Lots Wholesale, Consolidated International,
Wisconsin Toy, and with online purchasing at www.biglotswholesale .com.
CLOSEOUT RETAILING
Closeout retailers provide a service to manufacturers by purchasing excess
product that generally results from production overruns, package changes, discontinued
products, or returns. Closeout retailers also take advantage of generally low
prices in the off-season by buying and warehousing seasonal and general merchandise
for future sales. As a result of these lower costs of goods, closeout retailers
can offer merchandise at prices lower to significantly lower than those offered
by traditional retailers.
RETAIL OPERATIONS
The Company's stores are known for their wide assortment of closeout merchandise.
Certain core categories of merchandise are carried on a continual basis, although
the specific brand-names offered may change frequently. The Company's stores
also offer a small but consistent line of basic items, strengthening their role
as dependable, one-stop shops for everyday needs. In addition, the stores feature
seasonal items for every major holiday, as well as a wide assortment of merchandise
for the home, including furniture, home d'cor, and domestics.
WHOLESALE OPERATIONS
The Company also sells wholesale merchandise which is generally obtained through
the same or shared opportunistic purchases of the retail operations. Advertising
of wholesale merchandise is conducted primarily at trade shows and by mailings
to past and potential customers. Wholesale customers include a wide and varied
range of major national and regional retailers, as well as smaller retailers,
manufacturers, distributors, and wholesalers.
Wholesale sales are recognized in accordance with the shipping terms agreed
upon on the purchase order. Wholesale sales are predominantly recognized under
FOB origin where title and risk of loss pass to the buyer when the merchandise
leaves the Company's distribution facility. However, when the shipping terms
are FOB destination, recognition of sales revenue is delayed until completion
of delivery to the designated location.
PURCHASING
An integral part of the Company's business is the sourcing and purchasing of
quality brand-name merchandise directly from manufacturers and other vendors
typically at prices substantially below those paid by traditional retailers.
The Company believes that it has built strong relationships with many brand-name
manufacturers and has capitalized on its purchasing power in the closeout marketplace
to source merchandise that provides exceptional value to customers. The Company
has the ability to source and purchase significant quantities of a manufacturer's
closeout merchandise in specific product categories and to control distribution
in accordance with vendor instructions, thus providing a high level of service
and convenience to these manufacturers. The Company supplements its traditional
brand-name closeout purchases with various direct import and domestically sourced
merchandise such as furniture, home d'cor, and seasonal items. The Company expects
its purchasing power will continue to enhance its ability to source quality
closeout merchandise for all of its stores at competitive prices.
COMPETITIVE CONDITIONS
All aspects of the retailing industry are highly competitive. The Company competes
with discount stores (such as Wal-Mart' and Target'), dollar stores, deep discount
drugstore chains, and other value-oriented specialty retailers.
6.02% 