True Value, a well-known hardware store brand that has been in business for 75 years, recently filed for bankruptcy. The company has announced that it will be selling most of its operations to a rival company, Do it Best. Despite the bankruptcy, True Value will continue its day-to-day operations of selling hardware and home goods to its 4,500 independently operated locations during the Chapter 11 process. Do it Best has placed a $153 million bid as a stalking horse bid.
Although True Value is facing a significant cash crunch, the company’s stores will remain open throughout the bankruptcy proceedings as they are not part of the bankruptcy itself. The company cited a slowdown in the housing market and consumers being more selective about discretionary purchases as contributing factors to their financial struggles. Larger competitors like Home Depot and Lowe’s have also been experiencing challenges in light of the pandemic, but they are in a stronger financial position compared to True Value. Other chains, such as Big Lots and LL Flooring, have also faced similar issues that led them to file for bankruptcy.
True Value’s CEO, Chris Kempa, stated that after a thorough evaluation of strategic alternatives, it was determined that selling the business was the best way to maximize value and serve their retail partners and stakeholders in the future. The acquisition by Do it Best, a member-owned wholesaler that sells hardware and home goods to independent stores, is expected to provide True Value and independent hardware stores with strong opportunities for growth in the coming years. Do it Best’s CEO, Dan Starr, expressed confidence in the acquisition and the potential for profitability through efficient operations in the industry.
The transaction between True Value and Do it Best is set to close by the end of the year, unless there are better offers presented in the meantime. This acquisition represents a significant change for True Value and its independently operated stores, as the company navigates through the bankruptcy process and looks towards a more profitable future under new ownership. The impact of this transaction on the hardware retail industry remains to be seen, as True Value transitions to a new phase in its long-standing history in the market. Despite the challenges faced by True Value and its competitors, the company remains optimistic about the potential for growth and success in partnership with Do it Best.
