People will go in for Cheerios, and come out with a lamp,” says Big Lots spokeswoman Keri Lucas, describing the Columbus, Ohio-based closeout retailer's plans to polish its image as a destination for household items. Two years after Big Lots moved to a single brand from a collection of various nameplates including Odd Lots and MacFrugals, the company is adding couches, desks, lamps, tables and other home furnishings to its merchandise mix.

Big Lots is retrofitting 213 stores this year to accommodate furniture, mostly in the Southeast. Where possible, each store will add up to 4,000 square feet of extra selling space. Al Bell, chief administration officer, says the chain's customers are investing in their homes and families, and furniture has become one the chain's three best performing categories, Bell says. He projects furniture will become a $500 million business this year for Big Lots. So far, 700 of nearly 1,400 locations sell furniture.

To supplement the new furniture offerings, Big Lots is building a $65 million, 1.2 million-square-foot warehouse in Durant, Okla., that will open in December. West Coast Big Lots stores will be among the last to see changes, according to the company.