True Value, a longstanding hardware store brand, has filed for bankruptcy and reached an agreement to sell its operations to competitor Do it Best. The company will continue its day-to-day operations of providing hardware and homeware tools to its independently operated locations throughout the Chapter 11 process. Do it Best has made a $153 million bid as the stalking horse in the sale.
Although True Value is facing financial challenges due to a cash crunch caused by the stalled housing market and shifting consumer preferences, its stores will remain open as they are not part of the bankruptcy proceedings. Larger competitors like Home Depot and Lowe’s have also experienced declines in recent years, but they are in a stronger financial position compared to True Value. Other chains, such as Big Lots and LL Flooring, have reported similar issues that led to bankruptcy.
After exploring various strategic alternatives, True Value CEO Chris Kempa stated that selling the business was the best option to maximize value and benefit retail partners and stakeholders in the future. Do it Best, a member-owned wholesaler specializing in hardware and home goods, believes that the acquisition of True Value will drive profitability and provide strong growth opportunities for independent hardware stores in the coming years.
Do it Best CEO Dan Starr emphasized the company’s track record of operational efficiency and stated that the acquisition, if completed, will offer the best prospects for growth for True Value and independent hardware stores. The transaction is expected to be finalized by the end of the year, unless superior offers are presented. True Value’s decision to sell to Do it Best marks a significant change in the hardware store industry and reflects the challenges faced by smaller chains in a competitive market dominated by larger players.
Overall, the sale of True Value to Do it Best represents a strategic move to ensure the long-term viability and success of the brand and its independent stores. By partnering with a company known for operational excellence and driving profitability, True Value aims to navigate the current challenges in the hardware retail sector and position itself for future growth. The transaction underscores the importance of adaptation and innovation in a changing market environment, where established brands must evolve to remain competitive and meet evolving consumer demands.
