The home sector remains distressed, with Big Lots and LL Flooring the next companies to keep on one’s watch list.

The off-price home goods retailer and the flooring specialist are both exploring options for cash infusions to stabilize liquidity needs.

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The distress of the two firms comes on the heels of Conn’s Inc.’s Chapter 11 filing in a Texas bankruptcy court on Tuesday to pursue an orderly wind-down of operations. The company on Thursday began liquidating the inventories at its retail banners, which includes Conn’s HomePlus and the W.S. Badcock banner, which was acquired this past December.

Big Lots Inc.

Big Lots is expected to close nearly 150 store locations across 28 states, roughly four times more than the 35 to 40 stores it said it expected to close in 2024 in a first quarter report filed in June with the Securities and Exchange Commission.

The regulatory filing said the retailer has incurred net losses in 2022, 2023 and the first quarter of 2024. It also said that it might be unable to comply with a covenant requirement, which “raises substantial doubt about the company’s ability to continue as a going concern.” In addition, Big Lots is reviewing options to improve its available liquidity, including raising additional capital. Bloomberg first reported that the chain has reached out to prospective investors on the possibility of a new loan backed by assets, such as the company’s leases.

The new loan is in addition to the $200 million term loan facility Big Lots inked with Gordon Brothers Capital this past April. Big Lots at the time described the Gordon Brothers facility as “incremental” to the borrowing capacity within its existing $900 million asset-based revolving loan facility.

The company did not respond to a request for comment by press time.

Three years ago, the home decor off-pricer tried to broaden its appeal by carrying more branded and private-label fashion merchandise. Then consumers shifted their spending patterns. The retailer, which has a heavy focus on furniture, saw its low-income customers get impacted by post-COVID inflationary pressures and a limited capacity for higher-priced discretionary purchases.

Home retailers who sell furniture also faced supply chain issues, as well as increased shipping costs for imports and deliveries to consumers. Big Lots was no exception.