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true value hardware files for bankruptcy plans 153 million sale to do it best

True Value Hardware Files for Bankruptcy, Plans $153 Million Sale to Do it Best

True Value Hardware Files for Bankruptcy, Plans Sale to Do it Best

True Value, a venerable name in the hardware store industry, has filed for Chapter 11 bankruptcy protection. The company has announced plans to sell the majority of its operations to rival Do it Best, a member-owned wholesaler of hardware and home goods.

Despite the bankruptcy filing, True Value assures that day-to-day operations will continue uninterrupted at its 4,500 locations during the proceedings. Importantly, individual True Value stores are not included in the bankruptcy and will remain open for business as usual.

Do it Best has made a stalking horse bid of $153 million for True Value’s assets, setting the minimum price for potential competing offers. The proposed acquisition is expected to close by the end of the year, subject to court approval and the absence of higher bids.

True Value’s financial challenges stem from a stagnant housing market and shifting consumer spending habits. As discretionary purchases have become more selective, the company has faced a significant cash crunch. This trend has affected the broader home improvement sector, with even larger competitors like Home Depot and Lowe’s experiencing financial pressures, albeit from a stronger position.

The hardware retailer’s struggles mirror those of other retail chains in the sector, such as Big Lots and LL Flooring, which have also recently sought bankruptcy protection.

True Value CEO Chris Kempa stated that the decision to sell came after a comprehensive evaluation of strategic alternatives. “This transaction represents the best path forward to maximize value and serve our stakeholders,” Kempa said in a statement.

Do it Best CEO Dan Starr expressed optimism about the acquisition, emphasizing that it would “enhance growth opportunities for True Value and independent hardware stores.” The merger is poised to create a more robust entity in the competitive hardware and home improvement market.

As the bankruptcy process unfolds, industry observers will be watching closely to see how this consolidation impacts the landscape of independent hardware stores and the broader home improvement sector.