True Value, a well-known 75-year-old hardware brand, has officially filed for bankruptcy and is in the process of selling most of its operations to rival company Do it Best. Despite the Chapter 11 filing, True Value’s 4,500 independently operated stores will remain open during the proceedings. The company’s financial troubles stem from a stalled housing market and a decrease in consumer spending on discretionary items like hardware, making it difficult for them to stay competitive.
While major competitors like Home Depot and Lowe’s have also faced challenges in recent years, they remain in a stronger financial position than True Value. The company is now working through a $153 million bid from Do it Best, a member-owned wholesaler, which has agreed to buy True Value’s assets as part of the bankruptcy process. The deal is set to be finalized by the end of 2024.
True Value CEO Chris Kempa said that the sale was the best way forward to ensure the future success of their retail partners and stakeholders. The decision follows a thorough evaluation of alternatives, with the sale seen as the best opportunity to preserve and grow the business in a difficult economic environment.
Do it Best, which supplies hardware, lumber, and home goods to independent stores, sees the acquisition as a chance to strengthen both companies. CEO Dan Starr noted that his company has a proven track record of improving profitability through efficient operations, and believes this deal will provide significant growth opportunities for True Value stores.
As the transaction progresses, both companies are hopeful that the merger will provide stability and renewed growth in the hardware industry. True Value’s bankruptcy, however, is a reminder of the challenges facing many retail businesses, especially smaller chains, as they navigate economic downturns and changing consumer behaviors.
