After securing a last-minute buyer, one of the largest flooring suppliers in the United States is reversing its decision to close all of its stores.
LL Flooring, formerly known as Lumber Liquidators, announced last week that it would close after three decades.
It has been learned that the executives have signed an agreement with the private equity firm F9 Investments for the sale of their business.
F9 is owned by Tom Sullivan, who founded Lumber Liquidators more than 30 years ago before leaving in 2017. He says the company will be “going back to basics” and changing the name as well.
Just over half of the remaining 430 stores will close permanently and their stock will be sold off in massive clearance sales over the next 12 weeks.
Even the stores being saved are expected to have liquidations as Sullivan looks to refresh the products he offers.
LL Flooring, which had 442 stores in 47 states earlier this year, filed for bankruptcy on Aug. 11. It had planned to close all of them, but now half have been saved at the last minute by its former founder.
Under the terms of the deal, which is expected to close by the end of September, F9 will acquire 219 stores and a distribution center in Virginia, as well as the LL Flooring brand.
However, the remaining 211 stores are still planned to close.
That includes 117 locations where closures were recently initiated and another 94 that were already in the process when the Virginia company filed for Chapter 11 bankruptcy protection on Aug. 11.
The retailer, which specializes in hardwood flooring, has faced declining sales over the past year as families cut back on home renovations.
Last week, LL Flooring said it would be “winding down operations” and closing all of its stores after failing to find a buyer in negotiations.
But that changed after a deal was reached with F9 on Friday.
In a statement, LL Flooring President and CEO Charles Tyson said the company was “pleased to have reached this agreement” with F9 “following significant efforts by our team and advisors to preserve the business.”
Tyson added that LL Flooring remains “committed to continuing to serve” customers and suppliers as the transaction moves forward in bankruptcy court for approval.
Miami-based F9 is owned by Tom Sullivan, who founded Lumber Liquidators more than 30 years ago.
Sullivan told The Associated Press that the 219 stores F9 is buying will reopen under the Lumber Liquidators name.
“We’re going back to basics,” Sullivan said.
‘Basically, yellow and black are coming back… We know what worked before. It’s not fancy offices in Richmond with 200 people who didn’t know the flooring business.
‘We have great people in our stores who know flooring and customers who want a good deal and know that Lumber Liquidators is the place to go.’
Sullivan explained that the company plans to narrow the selection to a more “manageable” range of flooring options and get rid of material that appears duplicate or doesn’t sell well.
As a result, customers will likely see deep discounts on much of the inventory left over from LL Flooring’s bankruptcy proceedings.
He added that the company will be closely aligned with Cabinets To Go, another F-9-owned brand that he founded, to help with shipping efficiency.
Following news last month that LL Flooring was in financial trouble, customers took to Reddit.
“People are mortgaged to the max on properties that need renovation. They can’t afford to make improvements at the moment,” wrote one.
Tom Sullivan founded Lumber Liquidators in 1994 by purchasing excess lumber from companies and reselling it at a discount.
At first, the company operated out of the back of a pickup truck in Stoughton, Massachusetts.
Soon after, Sullivan began dealing directly with factories as he sought to cut out wholesalers who acted as middlemen and to lower prices to outperform rivals.
The company had already faced problems after a 2015 “60 Minutes” segment reported that the laminate flooring it sold had illegal and dangerous levels of formaldehyde.
Lumber Liquidators later said it would stop selling the product and agreed to pay $36 million to settle two class-action lawsuits in 2017.
Sullivan left the company in 2017 and later fell out with the board. He had tried to take over the company but has so far been rebuffed.
Lumber Liquidators was renamed LL Flooring in 2022. It has struggled to turn a profit in recent years.
The troubles for LL Flooring come amid a widespread “retail apocalypse” that sees stores struggling with ever-tightening margins at a time when Americans are cutting back on spending.
There were almost 2,600 store closures in the first four months of 2024If this trend continues, almost 8,000 people will have been lost by the end of the year.
Last week it became known that Big Lots, which has already closed a quarter of its 1,400 stores, is on the verge of bankruptcy. The news sent its shares tumbling 50 percent.
In recent months, Walmart has closed three more underperforming stores. Best Buy closed ten. in March.
Badcock is another home goods retailer that was struggling with money. It had more than 380 stores in Florida, Alabama, Mississippi, Tennessee, North Carolina, South Carolina, Georgia and Virginia, all of which will close at an unspecified date.
LL Flooring is the largest flooring company in the US.
Dollar stores have also been hit hard: 99 Cents Only announced in April that it would close all 371 of its stores in California, Texas, Arizona and Nevada.
The 1,000 closures of Family Dollar and its sister company Dollar Tree will occur in the next three years.
Express, a mall staple, filed for bankruptcy in April and said it would close 95 Express locations along with all of its UpWest stores.
In early May, Rue21, the teen fashion chain that is a fixture in malls across the United States, also said it will close all 543 of its U.S. stores after going bankrupt.