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A PROMINENT hardware brand has filed for bankruptcy this month after over 70 years in business.
Now, it plans to sell operations to one of its biggest competitors.
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True Value began its Chapter 11 proceedings in the US Bankruptcy Court for the District of Delaware, per a Monday press release.
It signed an agreement to sell all of its assets to Do it Best Corp, a hardware store company formerly known as Hardware Wholesalers.
True Value currently operates over 4,500 locations in the United States and internationally.
Customers can rest assured that their local stores will not be impacted by the sale agreement.
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The hardware wholesaler’s locations are owned independently by franchisees and are not part of the bankruptcy filing, aside from a single location owned by the company in Palatine, Illinois, a northwest Chicago suburb.
“True Value will continue its day-to-day operations serving 4,500 independently owned retailers that rely on True Value for the right products, trusted expertise, and its 75-year-old iconic brand,” the release stated.
Chris Kempa, True Value’s CEO, said the bankruptcy filing and sale to Do it Best Corp was made after considering several other avenues and was ultimately the move to “secure a stronger future for True Value.”
“After a thorough evaluation of strategic alternatives, we determined that the sale of our business was the path forward to maximize value and best serve our retail partners and other stakeholders into the future,” Kempa noted in the release.
“We believe that entering the process with an agreed offer from Do it Best, who has a similar decades-long history in the home improvement space and also operates with a focus on supporting members and helping them grow, is the most beneficial next step for True Value and our associates, customers, and vendor partners.”
THINKING AHEAD
Dan Starr, Do it Best president and CEO, echoed similar sentiments and stressed the acquisition as the best move for the company’s interests.
“A successful acquisition of True Value assets would represent a strategic milestone for Do it Best and home improvement retailers around the world,” Starr said in the release.
“This acquisition, if consummated, would provide True Value and independent hardware stores the strongest opportunities for growth for years to come.”
True Value expects the sale process to Do it Best Corp to be completed by the end of 2024.
During the start of the bankruptcy proceedings, Do it Best Corp acts as the “stalking horse.”
A stalking horse in a bankruptcy filing is the initial bidder picked by the bankrupt company to set the base price for its assets, per Investopedia.
It ensures that the best value for the affected company is found.
MEASURES TAKEN
Do it Best Corp has also committed additional funding, if needed, to True Value for it to continue operations during the bankruptcy proceedings.
For now, True Value has sought to use its cash collateral for operational expenses in the meantime.
The company also noted in Monday’s release that it took several steps before the bankruptcy filing to put itself in a profitable position in 2024.
Those steps included “modernizing its legacy operations, driving greater efficiencies, and investing in additional marketing campaigns.”
NOT ALONE
True Value has added itself to a list of several prominent retailers that have filed for bankruptcy in 2024.
Big Lots officially filed in September after weeks of rumors and detailed plans to close down over 545 locations.
LL Flooring also submitted its Chapter 11 documents in August and confirmed it would shutter around half of its over 400 locations while reverting to its old name.
Furniture retailer Conn’s HomePlus also filed in July, with 170 locations gone for good.
