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    • True Value files for Chapter 11 bankruptcy are sold to Do It Best
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    True Value files for Chapter 11 bankruptcy are sold to Do It Best

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    All of True Value’s 4,500 stores will remain open during the bankruptcy process because they are independently owned.

    Hardware wholesaler True Value has filed for Chapter 11 bankruptcy amid plans to sell its business to its home improvement rival, Do It Best.

    Chicago-based True Value said in a news release Monday that all of its 4,500 stores will remain open during the bankruptcy process because they are independently owned. The 75-year-old company started the process of reaching a deal with Do It Best, which has offered to pay $153 million in cash to buy the company, Reuters reported.

    True Value, which sells a variety of home improvement products such as tools, lumber and plumbing, said in bankruptcy filings that it has succumbed to slumping sales that have hit other companies in the industry. The company has between $500 million and $1 billion in total debt, Reuters reported, citing its bankruptcy filing.

    “We have determined that selling our business is the path forward to maximize value and best serve our retail partners and other stakeholders going forward,” Chris Kempa, CEO of True Value, said in a statement. “We believe that entering the process with an agreed offer from Do it Best, which has a similar decades-long history in the home improvement field and also operates with a focus on supporting members and helping them grow, is the most beneficial next step is for Real Value.”

    Bankruptcy: More than 340 Big Lots stores will close: See the full list of closures after dozens of locations were added

    Do It Best becomes main bidder for True Value

    Under the agreement with Do It Best, the home improvement rival will become a “stalking horse” bidder, True Value said. That means that while the Fort Wayne, Indiana company is technically the lead bidder, True Value remains open to better offers.

    In addition to agreeing to pay $153 million in cash, Do It Best would also assume about $45 million in contracts and other obligations and hire some True Value employees, Reuters reported.

    Do it Best is a wholesaler of wood and hardware products for independent stores, owned by its members. In its own press release, Sales said the sale would create a global network of more than 8,000 stores in the US and more than 50 countries around the world.

    The transaction with Do it Best is expected to be completed at the end of this year.

    “We understand the unique challenges of the retail industry, and if we are successful in our bid for these assets, we will be committed to driving the growth of True Value stores, together with our valued Do it Best member owners,” Do it Best President and CEO Dan Starr said in a statement. “This acquisition would represent not only the growth of Do it Best, but also a brighter future for the entire independent home improvement channel.”

    Retailers are struggling with bankruptcies

    True Value, like many other retailers, is struggling with declining sales due to rising prices and a decline in consumer spending.

    It is now among a handful of prominent restaurant and retail chains that have filed for bankruptcy since the pandemic, including LL Flooring, Red Lobster, Rite Aid, Bed Bath & Beyond and Christmas Tree Shop. One of the latest to do so was discount retailer Big Lots, which has since closed hundreds of stores since bankruptcy proceedings were announced in July.

    Other retailers have announced rounds of location closures to eliminate “underperforming” locations. Hooters, Walgreens, Sears, Kmart, JC Penney and even Disney Stores are among those that have closed stores across the country since 2020.

    Contributing: Mary Walrath-Holdridge, USA TODAY

    Eric Lagatta covers the latest and trending news for USA TODAY. Reach him at [email protected]

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