True Value Files for Bankruptcy, Agrees to Sale to Rival Do it Best

True Value, a well-known hardware store brand with a 75-year history, has filed for bankruptcy and agreed to sell a substantial portion of its business to rival company Do it Best. The move reflects the challenges faced by retailers, particularly in the home improvement sector, as they grapple with a slowing economy, shifts in consumer spending, and increased competition from larger rivals.

True Value, which operates as a wholesaler supplying 4,500 independently owned stores, cited a “significant cash crunch” as a key factor leading to its bankruptcy filing. The company attributed its financial difficulties to a slump in the housing market, which has dampened demand for home improvement products, and a more cautious approach to discretionary spending by consumers.

The company plans to continue operating its business as usual during the Chapter 11 bankruptcy process, ensuring that its stores remain open and stocked. A “stalking horse” bid of $153 million has been submitted by Do it Best, a member-owned wholesaler that also supplies independent hardware stores. This initial bid sets a floor for the auction process, allowing other potential buyers to submit competing offers.

“After a comprehensive evaluation of our options, we determined that selling our business was the best path forward to maximize value for our retail partners and stakeholders,” said True Value CEO Chris Kempa.

Do it Best, if successful in acquiring True Value, plans to leverage its operational efficiency and industry expertise to enhance True Value’s profitability and create growth opportunities for its independent retailers.

“We believe that this acquisition would provide True Value and its retailers with the strongest platform for future growth,” stated Do it Best CEO Dan Starr.

The transaction is expected to be finalized by the end of the year, unless a higher bid is received during the auction process.

Key Takeaways:

• True Value, a 75-year-old hardware store brand, has filed for bankruptcy and agreed to sell its business to competitor Do it Best.
• The company cited financial challenges stemming from a slump in the housing market and weak consumer spending as reasons for the bankruptcy filing.
• True Value’s stores will remain open during the bankruptcy proceedings.
• The deal is expected to close by the end of the year, barring a higher bid from another buyer.

True Value’s bankruptcy highlights the challenges faced by retailers in a rapidly changing economic environment. The company’s struggles underscore the impact of a slowing housing market, shifting consumer spending patterns, and fierce competition from larger rivals on the financial health of smaller businesses.