At the end of 2024, the general hardware dealer network True Value has filed for Chapter 11 debt and intends to sell its assets to Do It Best, a rival company. The classic components provider has been selling tools, hardwood, piping, hardware, heating supplies, and another home improvement goods for about 75 years.
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The Chicago-based company reported between$ 500 million and$ 1 billion in total liabilities, according to its Oct. 14 Chapter 11 filing in a Delaware U. S Bankruptcy Court, Reuters reported.
Real Value, founded in 1948, said it will remain providing its independently owned 4, 500 retail outlets with items, as they are not part of the debt. The business exists as a member-owned producer collaborative that generally sells its products to components sellers, garden centers, business distributors, and another merchants, according to S&, P Capital IQ.
True Value has been experiencing losses despite total retail sales of$ 10 billion, which has been worsened by rising costs brought on by inflation and higher interest rates.
Would It Best has agreed to work as a” bullying horse” bid for True Value’s property, which means that its Chicago-based enemy will also be open to higher bids.
” After a thorough examination of strategic options, we decided that the price of our company was the best course of action to add value and best assist our financial partners and other stakeholders in the future,” said True Value CEO Chris Kempa.
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The most advantageous next step for True Value and our associates, customers, and vendor partners is” to enter the process with an agreed offer from Do it Best, who has a similar decades-long history in the home improvement industry and also operates with a focus on supporting members and helping them grow,” Kempa said.
The need for lumber and building materials has decreased as a result of the housing market’s collapse and rising mortgage rates.
This has led to a slump in new homeowners ‘ purchases of new furniture, such as beds, couches, tables, chairs, and hardware.
Home Depot and Lowe’s have struggled to adapt to the slowing economy because big-box retailers like Walmart and Target draw cash-strapped customers looking for less expensive deals.
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Do It Best will take on about$ 45 million in contracts and other obligations and retain some of its current employees in addition to paying$ 153 million for True Value in cash.
Due to declining sales, home furnishing firms like Big Lots and LL Flooring filed for bankruptcy in September.
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Corporate bankruptcies have surged 20 percent from 2023 to 2024, and according to data provider Epiq AACER, over 22, 550 businesses are now seeking protection from creditors.
Dan Starr, the CEO of Do it Best, called the supplier’s acquisition of True Value a strategic milestone. A successful acquisition of True Value assets would be a strategic turning point for Do it Best and other home improvement stores all over the world, Starr said.
Do it Best has a proven track record of achieving profitability through its most cost-effective operations. This acquisition, if consummated, would provide True Value and independent hardware stores the strongest opportunities for growth for years to come”, he continued.