True Value filed for Chapter 11 bankruptcy protection Monday and plans to sell its 75-year-old business to a competitor, the latest hardware company to lose out to the housing market downturn, the company announced. did.
based in chicago The company announced that it will continue its daily operations. Through the Chapter 11 process, it is sold at 4,500 independent retailers.
Hardware and lumber wholesaler Do It Best was the horse bidder and agreed to pay $153 million in cash for the sinking company. According to court filings.
“After a thorough evaluation of strategic alternatives, we believe the sale maximizes value and provides long-term benefits to our retail partners and other stakeholders,” Chris Kempa, CEO of True Value, said in a statement. We have decided that this is the path to providing the best possible service.”
Like other hardware companies, TrueValue fell victim to the downturn in the housing market, it said in a bankruptcy court filing.
High mortgage interest rates have slowed the housing market and reduced demand for lumber and building materials.
Home Depot and Lowe's are also struggling to recover from the consumer downturn. Instead, discount retailers like Target and Walmart became popular as cash-strapped customers looked for cheaper deals.
Sales of household goods were also weak, as new homeowners typically buy new furniture such as beds, sofas, tables and chairs.
Home furniture retailers Big Lots and LL Flooring announced in September that they had filed for bankruptcy after plummeting sales.
Do it Best is a membership-based hardware and lumber wholesaler that sells building materials to independent stores. The company is based in Fort Wayne, Indiana. Last year's sales were approximately $5 billionsaid the company.
“Do It Best has a track record of driving profitability through the industry's most efficient operations,” Do It Best CEO Dan Starr said in a statement. “Once completed, this acquisition will provide True Value and independent hardware stores with the strongest growth opportunity for years to come.”
The sale to Do It Best, if it remains the best offer, is expected to be completed by the end of the year.
