Hardware competitor acquires financially struggling True Value in bankruptcy proceedings
In a public statement, True Value announced they'll carry on with their day-to-day activities of selling hardware and home improvement tools at their 4,500 independently managed outlets, even during the Chapter 11 proceedings. This includes a proposed $153 million bid from competitor Do it Best.
According to documents submitted to the bankruptcy court, True Value is dealing with a severe cash shortage. The housing market slowdown and consumers being more selective with non-essential purchases like hardware have contributed to the problem. Compared to True Value, bigger competitors like Home Depot and Lowe’s are still financially stable despite a prolonged downturn since the pandemic surge.
However, several other chains, such as Big Lots and LL Flooring, have also faced similar challenges, ultimately leading them into bankruptcy.
In a statement, True Value CEO Chris Kempa said, "Following a comprehensive analysis of potential solutions, we concluded that selling our business was the best approach to maximize value and cater to our retail partners and other key stakeholders in the long term."
Do it Best, a cooperative wholesaler dealing in hardware, lumber, and other home items for independent stores, offered the bid.
Do it Best CEO Dan Starr stated, "We have a track record of boosting profitability through efficient operations within the industry. If the acquisition goes through, it would provide True Value and independent hardware retailers with substantial growth prospects for several years ahead."
The deal with Do it Best is expected to be finalized by year end, unless a superior offer emerges.
True Value's CEO, Chris Kempa, mentioned in a statement that selling the business was the best approach to maximize value for their retail partners and stakeholders in the long term, considering the financial situation of the company. In the hardware industry, even bigger players like Home Depot and Lowe's have managed to stay financially stable despite challenges, showing the potential for growth and improvement.
