Another Major Retailer Files for Bankruptcy. Will NJ & PA Stores Close?
True Value, the well-known hardware wholesaler based in Chicago, has recently filed for Chapter 11 bankruptcy as part of its plan to sell the business to home improvement competitor, Do It Best.
Despite the bankruptcy proceedings, True Value’s 4,500 independently-owned stores, with 37 in New Jersey and over 100 in PA, will stay open and continue operating.
The company, which has been around for 75 years, took this step to finalize an agreement with Do It Best, which has offered $153 million in cash for the purchase, according to reports.
In its court filings, True Value explained that the decision was influenced by declining sales that have impacted many businesses since the pandemic.
The company’s total debts are estimated to be between $500 million and $1 billion, as mentioned in the bankruptcy documents.
True Value’s CEO, Chris Kempa, expressed that the sale is intended to maximize the company's value and provide the best support for its retail partners.
He highlighted that working with Do It Best, a company with a similar history in the home improvement industry, is the right path forward.
Under the agreement, Do It Best will become a "stalking horse" bidder.
Do you know what that means?
It means that although they are the initial lead bidder, True Value can still consider better offers if they come along.
Alongside the $153 million cash offer, Do It Best would also assume around $45 million in contracts and other obligations, and potentially hire some of True Value’s employees.
Do It Best, a member-owned wholesaler that supplies lumber and hardware to independent stores, emphasized that the acquisition will help create a global network of over 8,000 stores, spanning across the U.S. and more than 50 countries.
The sale is expected to wrap up by the end of the year.
True Value's bankruptcy filing isn't the only one recently.
Several other companies in the retail and restaurant industries have filed as well including LL Flooring, Rite Aid, and Bed Bath & Beyond.
There have been widespread store closures with chains like Hooters, Walgreens, and even Disney Stores.
They've been shutting down underperforming locations since 2020.
For more information on True Value from USA Today, click here.
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