Big Lots 2007 Annual Report Download - page 91

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PART I
ITEM 1. BUSINESS
The Company
Big Lots, Inc., an Ohio corporation, through its wholly owned subsidiaries (collectively referred to herein as
“we,” “us,” and “our”), is the nation’s largest broadline closeout retailer (see below for a discussion of closeout
retailing). At February 2, 2008, we operated a total of 1,353 stores in 47 states. Our goal is to strengthen and
build upon our leadership position in broadline closeout retailing by providing our customers with great savings
on brand-name closeouts and other value-priced merchandise. You can locate us on the Internet at www.biglots.
com. The contents of our websites are not part of this report.
Similar to many other retailers, our fiscal year ends on the Saturday nearest to January 31, which results in some
fiscal years comprised of 52 weeks and some comprised of 53 weeks. Unless otherwise stated, references to years
in this report relate to fiscal years rather than calendar years. Fiscal year 2008 (“2008”) is comprised of the 52
weeks that began on February 3, 2008 and will end on January 31, 2009. Fiscal year 2007 (“2007”) was comprised
of the 52 weeks that began on February 4, 2007 and ended on February 2, 2008. Fiscal year 2006 (“2006”) was
comprised of the 53 weeks that began on January 29, 2006 and ended on February 3, 2007. Fiscal year 2005
(“2005”) was comprised of the 52 weeks that began on January 30, 2005 and ended on January 28, 2006.
We manage our business on the basis of one segment: broadline closeout retailing. Please refer to the
consolidated financial statements and related notes in this Annual Report on Form 10-K (“Form 10-K”) for
our financial information. We internally evaluate and externally communicate overall sales and merchandise
performance based on the following key merchandising categories: Consumables, Home, Furniture, Hardlines,
Seasonal, and Other. The Consumables category includes the food, health and beauty, plastics, paper, and
pet departments. The Home category includes the domestics, stationery, and home decorative departments.
The Furniture category includes the upholstery, mattresses, ready-to-assemble, and case goods departments.
Case goods consist of bedroom, dining room, and living room furniture. The Hardlines category includes
the electronics, appliances, tools, and home maintenance departments. The Seasonal category includes lawn
& garden, Christmas, summer, and other holiday departments. The Other category includes the toy, jewelry,
infant accessories, and apparel departments. Other also includes the results of certain large closeout deals that
are typically acquired through our alternate product sourcing operations. See note 12 to the accompanying
consolidated financial statements for the net sales results of these categories for 2007, 2006, and 2005.
In May 2001, Big Lots, Inc. was incorporated in Ohio and was the surviving entity in a merger with
Consolidated Stores Corporation, a Delaware corporation. By virtue of the merger, Big Lots, Inc. succeeded to
all the business, properties, assets, and liabilities of Consolidated Stores Corporation, a Delaware corporation.
Our principal executive offices are located at 300 Phillipi Road, Columbus, Ohio 43228, and our telephone
number is [phone]. All of our operations were located within the United States of America at the end of
each of the last three years.
Closeout Retailing
We attempt to maximize the amount of closeout merchandise available in our stores and to offer merchandise
with great value to our customers. We work closely with our vendors to obtain merchandise, including top
brand merchandise that is easily recognizable by our customers. Closeout retailers purchase merchandise
that generally results from production overruns, packaging changes, discontinued products, liquidations, or
returns. As a result, closeout retailers generally can purchase most merchandise at lower costs and offer most
merchandise at lower prices than those paid and offered by traditional discount retailers. In addition to closeout
merchandise, we stock many products on a consistent basis at our stores. This merchandise may not always be
the same brand or may be off-brand because we attempt to provide our customers with merchandise at a price
that represents a great value. For net sales by product category and net sales by product category as a percent of
total net sales, see the 2007 compared to 2006 and 2006 compared to 2005 sections of Management’s Discussion
and Analysis of Financial Condition and Results of Operations.