Big Lots 2013 Annual Report Download - page 145

3
Closeout Retailing
Closeout merchandise generally results from production overruns, packaging changes, discontinued products, order
cancellations, liquidations, returns, and other disruptions in the supply chain of manufacturers. We can generally purchase
closeout merchandise at lower costs than would be paid by traditional discount retailers, and offer closeout merchandise to our
customers at lower prices than those offered by traditional discount retailers. We attempt to maximize the amount of closeout
merchandise available in our stores. We work closely with our vendors to obtain brand-name closeout merchandise that is
easily recognizable by our customers. In addition to closeout merchandise, we stock many products on a consistent basis that
we believe provide strong value to our customers. For net sales and comparable store sales by merchandise category, see the
discussion below under the captions “2013 Compared To 2012” and “2012 Compared To 2011” in “Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) of this Form 10-K.
Real Estate
The following table compares the number of our stores in operation, by segment, at the beginning and end of each of the last
five fiscal years:
2013 2012 2011 2010 2009
U.S.
Stores open at the beginning of the year 1,495 1,451 1,398 1,361 1,339
Stores opened during the year 55 87 92 80 52
Stores acquired during the year
—
—
—
—
—
Stores closed during the year (57) (43) (39) (43) (30)
Stores open at the end of the year 1,493 1,495 1,451 1,398 1,361
Canada
Stores open at the beginning of the year 79 82
—
—
—
Stores opened during the year 2
—
—
—
—
Stores acquired during the year
—
—
89
—
—
Stores closed during the year (4) (3) (7)
—
—
Stores open at the end of the year 77 79 82
—
—
Consolidated
Stores open at the beginning of the year 1,574 1,533 1,398 1,361 1,339
Stores opened during the year 57 87 92 80 52
Stores acquired during the year
—
—
89
—
—
Stores closed during the year (61) (46) (46) (43) (30)
Stores open at the end of the year 1,570 1,574 1,533 1,398 1,361
During 2009, the U.S. commercial real estate market softened and, as a result, the availability of space improved and rental
rates eased, which enabled us to experience net new store growth from 2009 through 2012. In addition, in 2011, we acquired
89 stores in Canada as a result of our acquisition of Liquidation World Inc. (subsequently named Big Lots Canada, Inc.).
During the second half of 2012, we determined that rental rates had begun to stabilize, and in many markets increase, and
availability of quality real estate was declining. The combination of these real estate factors, softness in our financial
performance, and announced management transition plans led us to slow our net new store growth plans. Furthermore, during
the fourth quarter of 2013, we finalized portions of our three-year strategic plan which led to our announcement of the
Canadian Wind Down. For additional information about our real estate strategy, see the discussion under the caption
“Operating Strategy - Real Estate” in the accompanying MD&A in this Form 10-K.