True Value files for bankruptcy and sells itself to a hardware competitor

new York
CNN
—

True Value, a 75-year-old home improvement brand, has filed for bankruptcy and is selling nearly all of its operations to a competitor, the company announced Monday.

In a press release, True Value announced that the company will stop daily sales of hardware and other household goods to its 4,500 independently operated locations.

True Value said its stores would remain open because they are not part of the bankruptcy process.

True Value said in bankruptcy filings that the company is facing a significant liquidity crisis as the real estate market has stalled and consumers have become significantly more selective about discretionary purchases such as hardware. Larger competitors like Home Depot and Lowe's have also been in years of crisis since the pandemic boom, but are still in a significantly better financial situation than True Value.

Still, a number of other chains have raised similar issues that also drove them into bankruptcy, including Big Lots and LL Flooring.

“After a thorough evaluation of strategic alternatives, we concluded that selling our business is the right path to maximize value and best serve our retail partners and other stakeholders going forward,” said Chris Kempa, CEO of True Value, in a press release.

Do it Best is a member-owned wholesaler that sells hardware, lumber and other home goods to independent stores.

“Do it Best has a proven track record of increasing profitability through the most efficient operations in the industry,” Dan Starr, CEO of Do it Best, said in a statement. “If this acquisition goes through, it would provide True Value and independent home improvement stores with the greatest growth opportunities in the coming years.”

The transaction with Do it Best is expected to be completed by the end of the year unless there are better offers.