True Value, the 75-year-old hardware store chain, has filed for Chapter 11 bankruptcy, the Chicago-based company announced Monday.
True Value will sell “substantially all” of its business operations to industry rival Do It Best Corp., a member-owned wholesaler that sells hardware, lumber and other goods to independent stores. According to the bankruptcy filing, Do It Best submitted a “stalking horse,” or lead, bid price of $153 million, which is designated to establish a minimum sale price while still allowing for better offers to be submitted.
However, True Value’s 4,500 independently operated stores — its website lists dozens in Oregon — will remain open during its bankruptcy process since they are “not a part of chapter 11 proceedings,” except for one company-owned store in Palatine, Illinois, according to a news release. The company plans to complete its sale process to Do It Best by the end of this year, pending higher offers.
“After a thorough evaluation of strategic alternatives, we determined that the sale of our business was the path forward to maximize value and best serve our retail partners and other stakeholders into the future,” True Value CEO Chris Kempa said in the release. “We believe that entering the process with an agreed offer from Do it Best, who has a similar decades-long history in the home improvement space and also operates with a focus on supporting members and helping them grow, is the most beneficial next step for True Value and our associates, customers, and vendor partners.”
CEO Dan Starr said his company acquiring True Value would mark a “strategic milestone” for “home improvement retailers around the world.”
“This acquisition, if consummated, would provide True Value and independent hardware stores the strongest opportunities for growth for years to come,” he said in the release.