True Value, the hardware retailer based in Chicago, has filed for Chapter 11 bankruptcy and agreed to sell itself for $153 million to Do it Best Corp., the home improvement company based in Fort Wayne, Indiana, according to court filings.
True Value’s 4,500 stores, including 10 in Chicago, are independently owned and will continue day-to-day operations. Member stores are not a part of the bankruptcy proceedings, except for one company-owned store in Palatine. The manager of the Palatine store declined to comment about True Value’s announcement when contacted by phone.
True Value on Monday filed for voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware. The 75-year-old brand will continue to pay vendors and employees and provide benefits.
“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,” said Chris Kempa, True Value’s chief executive, in a press statement.
“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.”
The deal is expected to close by the end of the year, pending regulatory and court approval.
Dan Starr, Do it Best’s chief executive, said in a press statement: “As the industry’s only full-service co-op distributor, our focus remains on building strong, profitable partnerships that benefit our stores, our vendors and consumers. This acquisition would represent not just the growth of Do it Best but a brighter future for the entire independent home improvement channel.” Starr also cited “the unique challenges of the retail industry.”
Both True Value and Do it Best are private companies. Large publicly listed improvement retailers like Home Depot have seen flagging sales as they deal with homeowners putting off bigger projects due to higher costs and lingering concerns about inflation, according to the Associated Press.
Do it Best claims to be the country’s largest member-owned co-op for hardware and lumber with annual sales of nearly $5 billion. The deal with True Value would create a store network with more than 8,000 locations in the United States and more than 50 countries around the world, according to Do it Best.
AP contributing