“Bankruptcy Update: LL Flooring Saved by New Owner, Yet 200 Locations to Shut Down”
According to The Sun, HOME improvement chain LL Flooring is reversing its decision to close all its stores after securing a last-minute buyer. Despite this new development, the bankrupt retailer will still proceed with closing hundreds of locations.
Previously known as Lumber Liquidators, LL Flooring filed for Chapter 11 bankruptcy in August, initially stating it was unable to secure an offer and planned to shutter its remaining locations. However, a change of fate occurred when the flooring company found a buyer willing to keep some of its stores operational.
New Ownership Deal
On September 4, LL Flooring announced it signed an agreement with private equity firm F9 Investments, which will acquire 219 LL Flooring stores, a Virginia distribution center, the company’s intellectual property, and other assets. The deal is expected to close by the end of September.
Charles Tyson, LL Flooring president and CEO, expressed optimism about the agreement: “We are pleased to have reached this agreement with F9 Investments for a going-concern sale following significant efforts by our team and advisors to preserve the business and maintain ongoing operations.” He added that they remain committed to serving customers while working with vendors and partners during this transition.
Store Closures Persist
Despite securing a new buyer, LL Flooring will still close 211 locations. Of these, 117 closures had already been initiated, and 94 stores were already in the process of shutting down when the bankruptcy filing occurred.
Return to Roots
F9 Investments is owned by Tom Sullivan, who originally founded Lumber Liquidators in 1994. Sullivan stated that the stores acquired will be reopened under the Lumber Liquidators name, emphasizing a return to the brand’s roots. “We’ll be getting back to basics,” he said, reinforcing that the company will focus on offering flooring expertise and great deals to customers.
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Sullivan also indicated that LL Flooring plans to streamline its product offerings by eliminating repetitive or underperforming options. Customers can expect major sales on inventory remaining from the bankruptcy process.
Challenges Faced by LL Flooring
LL Flooring has faced significant challenges over the years, including a damaging 2015 “60 Minutes” segment that revealed its laminate flooring contained dangerous levels of formaldehyde. This controversy led to a $36 million settlement for class-action lawsuits related to the issue.
The company changed its name from Lumber Liquidators in 2021 but has continued to struggle financially. LL Flooring reported a net sales drop of 18.5% in 2023 due to decreased foot traffic and demand. As of July 31, the company had over $416 million in debt against assets of just over $501 million.
In addition to LL Flooring, other retailers have also faced similar fates, with Conn’s HomePlus filing for bankruptcy and closing all its locations, and Big Lots announcing plans to shutter 545 locations.
