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True Value is the latest retailer to seek bankruptcy protection. The hardware store brand boasts dozens of locations in New Jersey.

The Chicago-based company announced the Chapter 11 filing in an Oct. 14 press release. True Value also said it plans to sell almost all of its operations to a competitor.

Under the terms of the deal, Do it Best, a member-owned wholesaler that sells hardware, lumber and other home goods to independent stores, would acquire most of True Value’s assets for $153 million.

While the process plays out in U.S. Bankruptcy Court for the District of Delaware, True Value said it will continue its day-to-day operations serving 4,500 retailers across the U.S.

With the exception of one company-owned store in Palatine, Ill., all True Value locations are independently owned and not part of the Chapter 11 case, the company said.

The transaction is expected to close by the end of the year – unless a better offer emerges, according to True Value.

Ahead of declaring bankruptcy, the 75-year-old company said it faced “significant liquidity challenges” as the housing market stalled and consumers became more selective about discretionary purchases like hardware, according to court documents.

Opportunities for growth

Discount home goods chains, such as LL Flooring and Big Lots, have said similar challenges led them to file for bankruptcy.

Prior to opting for Chapter 11, True Value said it tried to address those issues by modernizing legacy operations, investing in marketing campaigns and driving greater efficiencies.

In a statement, Chris Kempa, True Value’s chief executive officer, said, “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.”

“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. We thank these valued stakeholders for their continued loyalty as we work to secure a stronger future for True Value,” he said.

Dan Starr, president and chief executive officer at Fort Wayne, Ind.-headquartered Do it Best, stated, “A successful acquisition of True Value assets would represent a strategic milestone for Do it Best and home improvement retailers around the world.”

He also said, “Do it Best has a proven track record of driving profitability through the most efficient operations in the industry. This acquisition, if consummated, would provide True Value and independent hardware stores the strongest opportunities for growth for years to come.”

Other bankruptcy filings:

• Walgreens, Big Lots offer added insights on local store closings
• BurgerFi, Anthony’s Coal Fired Pizza owner files for Chapter 11
• PureGym makes $105M bid for Blink Fitness corporate ops; NJ, NY gyms