Gordon Brothers Retail Partners has just thrown a lifeline to the closure of retailer Big Lots after an earlier deal with Nexus Capital Management to acquire the company fell through.

Before Gordon Brothers intervened, Big Lots announced it would be forced to close all 900 stores. Now between 200 and 400 Big Lots branches will see another day.

“There is good news in retail jobs this morning,” wrote Neil Saunders, managing director of GlobalData Retail, on LinkedIn. “Big Lots, which filed for bankruptcy in September, has reached an agreement with Gordon Brothers Retail Partners to keep hundreds of stores open and save thousands of jobs.”

Gordon Brothers, which handled the sale of Big Lots, has agreed to buy all of Big Lots’ assets, including stores, distribution centers and intellectual property that it plans to resell to other retailers and companies.

And it won the first buyer. Variety Wholesalers will acquire between 200 and 400 Big Lots stores and two distribution centers. These stores will continue to carry the Big Lots banner in the future.

“The strategic sale to Gordon Brothers and transfer to Variety Wholesalers is a positive and significant achievement for Big Lots,” Big Lot president and CEO said in a statement.

“This sale agreement and transfer represents the greatest opportunity to preserve jobs, maximize the value of the property and ensure the continuity of the Big Lots brand,” he continued.

This Agreement is subject to bankruptcy court approval and other customary closing conditions.

variety wholesaler

Variety currently operates approximately 400 stores in the Southeast and Mid-Atlantic regions. The company is best known for its Roses Discount Stores and Roses Express Stores, but also operates Bargain Town, Super 10, Bill’s Dollar Stores and Maxway.

At this point, Variety hasn’t specified which stores will remain open, but it’s safe to assume they’ll be in the regions where the company already plays.

Variety also plans to retain current employees at stores that remain open and hire some key corporate employees to keep Big Lots operations running. Big Lots currently employs about 27,000 people, but the number that will move to Variety has not yet been determined.

Given Variety’s bargain positioning, it looks like the Big Lots brand has found a suitable home.

“We are pleased to enter into this strategic agreement with Big Lots and to work with Variety Wholesalers to chart a path that will enable Big Lots to continue to provide its customers with extreme bargains and an outstanding shopping experience,” said Rick Edwards, Head of North at Gordon Brothers Retail in America. His company also handles the remaining sales of the 700 Party City locations.

With this announcement, Variety President and CEO Lisa Seigies is essentially doubling her span of control. She has been with the company for six years and rose to the top after serving as the company’s chief merchandising officer.

She started in retail at Federated, now Macy’s, and also worked with Martha Stewart Living Omnimedia, Ross Stores and Stage Stores, among others.

Remains of large quantities

In its most recent earnings report for the first quarter ended May 4, the company reported a 10% decline in revenue to $1 billion and a net loss of $205 million. The company ended the last fiscal year with a loss of 14% to $4.7 billion after closing 500 stores in connection with the bankruptcy in September.

At the end of the first quarter, the company had inventory of $950 million, cash of $4 million and long-term debt of $574 million

Instead of reporting second-quarter earnings, the company instead filed for bankruptcy. At the time, assets and liabilities were listed in the range of $1 billion to $10 billion and between 5,001 and 10,000 creditors were named, according to Seeking Alpha.

Hopefully Gordon Brothers has another buyer or two up its sleeve to save more of the Big Lots brand, but it has a good head start.

“This at least gives Big Lots a chance of survival in some form. Although many changes will be required to optimize an offering that was frankly significantly subpar before bankruptcy,” concluded GlobalData’s Saunders.

See also:

ForbesBig Lots announces out-of-business sale as Nexus acquisition falls throughFrom Pamela N. Danziger