Finding the perfect something at the perfect price is one of my favorite pastimes, and I’m not alone. Customers are flocking to off-price stores like TJMaxx, HomeGoods, and Ollie’s Bargain Outlet as layoffs mount and shoppers tighten their budgets.
Foot traffic to these retail stores has surged in 2025, helping drive sales higher amid a shift away from full-price department stores, such as Macy’s and bigger stores like Target.
Ollie’s Bargain Outlet has particularly benefited thanks to its decision to capitalize on the bankruptcy of one of its largest rivals, Big Lots.
Big Lots’ failure and Chapter 11 bankruptcy allowed Ollie’s to acquire a slate of its storefronts. Big Lots closures also reduced competition at 290 of its 645 stores.
Alongside interest in a “treasure hunt” shopping experience and stretched budgets, Ollie’s Bargain Outlet finds itself in a prime position to win customers over the holidays and into 2026.
Ollie’s Bargain Outlet was founded by Mark Butler, Morton Bernstein, Harry Coverman, and Oliver “Ollie” Rosenberg at Bernstein’s lumber yard in Mechanicsburg, Pennsylvania, in 1982. After visiting a Building 19 location in Massachusetts, Butler started the company based on a simple premise that everyone in America loves a bargain.
Ollie’s stores are stocked with closeout and overstock items purchased at a discount and sold to customers at lower prices than those found in department stores. It aims for a 40% gross margin. If it can hit that target and significantly undercut prices at full-price stores, it will sell just about anything, including soap, food, toys, housewares, apparel, and electronics.
Ollie’s Bargain Outlet is seeing more foot traffic after rival Big Lots closed stores amid bankruptcy.Shutterstock
The company, known for its quirky, comic-book-style marketing, has been deliberate about its growth, slowly but consistently opening locations. It focused on Pennsylvania stores before entering Maryland in the 1990s. Despite Rosenberg’s passing in 1996, the company steadily expanded its store count under Butler’s leadership, reaching 20 locations by late 2000 and 36 stores by 2005, which lifted revenue to $150 million that year.
To supply its growing footprint, it consolidated its distribution at a large center in York, Pennsylvania, in 2008. A second distribution center was opened in 2014 in Georgia, one year before Ollie’s initial public offering on the stock market.
Sales continue to grow as Ollie’s opened more stores in new markets. In 2017, it operated 268 stores with sales exceeding $1 billion.
In December 2019, Butler passed away, and former Chief Operating Officer John Swygert took over as CEO. The company’s East Coast expansion continued under Swygert, with Ollie’s store count growing to 559 at the end of 2024, generating $2.3 billion in annual revenue.
In February 2025, Swygert transitioned to executive chairman, clearing the way for President Eric Van der Valk to assume Ollie’s CEO title. Before joining Ollie’s in 2021 as Chief Operating Officer, he was president and COO of Christmas Tree Shops, where he’d worked for 15 years.
Big Lots was one of America’s largest discount retailers, with 1,450 stores near its peak in 2015. However, a series of missteps that muddied its discount store image and saddled it with substantial debt took a toll, as Ollie’s and other competitors cut into its market share.
The company, which was founded in 1967 by Sol Shenk, was initially known for buying closeout auto parts (Shenk even bought DeLorean Motors’ assets during its bankruptcy).
It evolved over the years to sell a wide range of off-price products, but in 2013, under newly installed CEO David Campisi, Big Lots made an ill-advised shift to sell non-closeout items in its stores, leaving consumers with a confusing price experience.
Big Lots’ sales declined, particularly after 2021, falling 14% in fiscal 2023 (ending February 3, 2024), 11% in 2022, and 1% in 2021. In its final quarter before declaring bankruptcy on September 9, 2024, Big Lots reported year-to-date sales through the second quarter had fallen by 9.2% to $2.1 billion. It also $570 million in maturing short-term debt.
Sept. 9, 2024: Big Lots filed for Chapter 11 bankruptcy protection.Source: Kroll
Jan. 1, 2025: A bankruptcy court approved the sale of 200‑400 Big Lots stores and up to two distribution centers to Variety Wholesalers, facilitated by Gordon Brothers.Source: Reuters
Jan. 14, 2025: Gordon Brothers offers Big Lots store leases for sale nationwide (19,000 to 55,000 square‑foot properties).Source: Gordon Brothers
Feb. 27, 2025: Ollie’s Bargain Outlet Holdings, Inc. announced its acquisition of 40 Big Lots store leases from Gordon Brothers, bringing its total of Big Lots‑derived leases to 63.Source: Ollie’s Bargain Outlet Holdings
Big Lots’ restructuring amid bankruptcy included the liquidation of many stores, creating a great opportunity for Ollie’s Bargain Outlet.
Unlike Big Lots, Ollie’s balance sheet was strong, with no meaningful long-term debt and hundreds of millions in cash, despite its ongoing store opening program. The company leveraged its financial strength to acquire 63 leases on Big Lots stores, acquiring 23 leases in 2024 and another 40 leases in February 2025.
“These locations are the right size, come with favorable lease terms, are located in existing and adjacent trade areas, and have long serviced value conscious consumers,” said Ollie’s CEO van der Valk at the time.
The newly acquired stores bolstered its presence within the most attractive markets. At the same time, the permanent closure of many Big Lots locations provided a tailwind, leading to increased foot traffic at 290 Ollie’s stores during the second quarter of 2025.
The combination has accelerated Ollie’s revenue, with stores reopened under Ollie’s brand growing rapidly and same-store sales at existing Ollie’s within former Big Lots markets accelerating at a faster-than-normal pace.
Overall, comparable store sales at stores open at least one year rose 5% in the second quarter, “driven by an increase in transactions,” according to Helm.
Ollie’s stores and marketing boast a vibe similar to Trader Joe’s, with old-timey advertising encouraging a treasure-hunt mentality among customers searching for “Good Stuff Cheap.”
Ollie’s Army membership totaled 15.1 million people at the end of fiscal 2024, up 8% year over year. The company says members account for approximately 80% of sales at its stores, which can now be found in 34 states along the East Coast. The average Ollie’s Army member spends 40% more per visit than nonmembers.
“With so many retailers closing stores or going bankrupt in the past year, there is an opportunity to gain market share through expanding our footprint, acquiring new customers and turning these customers into loyal Ollie’s Army members,” said van der Valk on the Q2 earnings call.
That’s already happening. Exiting the second quarter, Ollie’s Army loyalty members totaled 16.1 million, a 10.6% increase from last year.
But it’s not only growth through Big Lots’ failure that’s driving results. Ollie has ramped up its organic new store growth this year, opening 54 stores during the first six months, which is “4x the number of stores we opened in the same period last year,” according to van der Valk.
The company sees opportunities arising from shifting customer behavior, forcing stores to reassess their footprints. The company is monitoring additional store closures and bankruptcy-related opportunities, and it plans to maintain a cautious approach to new store grand openings.
Overall, Ollie’s exited the second quarter, during which it opened 29 stores, with a target of 85 new locations this year, including the Big Lot stores. In 2026, it expects to exceed its 10% store growth goal again.
The store closures also have another positive impact for Ollie’s — more opportunities to buy inventory.
“There’s so many different sources of closeouts in any given quarter… Our model thrives on disruption,” said van der Valk. “The retail bankruptcies and store closures have certainly resulted in additional buying opportunities.”
Ollie’s is also seeking additional ways to boost visits from Ollie’s Army members. It hosted an Ollie’s Day event in the second quarter, offering an exclusive member-only shopping night with promotions tailored to members.
“The reimagined event was a huge success and exceeded all expectations. First and most importantly, we rewarded our Ollie’s Army members and acquired an abundance of new members. Second, the event was accretive to sales and earnings,” said van der Valk.
The Ollie’s Days event added 1% to the off-price retailers’ comp store sales in Q2.
It plans a similar Ollie’s Army Day with exclusive shopping for members on Dec. 15.
And it’s not just that Ollie’s is winning with lower- and middle-income shoppers. It is seeing growth across all income levels, including higher-income households, as more customers shift their spending habits.
Ultimately, Ollie’s Bargain Outlet believes there’s room to operate 950 stores in America, providing ample opportunities for further growth.
The company will provide an update on its progress during its third quarter earnings call, scheduled for Dec. 9.
Related: Popular TJMaxx rival stumbles as customer behavior shifts
This story was originally published by TheStreet on Nov 29, 2025, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.
