Big Lots Inc. completed the sale of its distribution center in Rancho Cucamonga, California, for $191 million. The facility was sold as a result of the company’s move to a new distribution center in Apple Valley, California.
Located in the Mojave Desert, the Apple Valley distribution center is a 1.4 million square foot facility that will improve speed to market, capacity and service to stores with advanced automation including an automatic storage retrieval system, robotic depalletizers, carton shuttles and carton sortation equipment. Bit Lots will utilize the Rancho Cucamonga distribution center on a leaseback arrangement until the Apple Valley distribution center is fully operational in spring 2020.
The company has reinvested $69 million of the sale proceeds to exercise a purchase option on its corporate headquarters in Columbus, effected through a qualified intermediary to accommodate a tax-deferred exchange. Net after-tax proceeds of approximately $90 million will be used to pay down a portion of the outstanding balance on the company’s unsecured line of credit.
Big Lots will recognize a one-time, pre-tax gain of approximately $179 million in the third quarter of fiscal 2019.
“The net proceeds, in addition to allowing us to effect a like-kind exchange for our corporate headquarters, will strengthen our balance sheet and support the continued investments we are making as part of our Operation North Star strategic transformation,” Big Lots Executive Vice President, General Counsel and Corporate Secretary Ronald “Rocky” A Robins Jr. said, in a statement.