LL Flooring To Liquidate, Close 400 Stores
A national flooring retailer is throwing in the towel after failing to secure a buyer during its bankruptcy.
LL Flooring Holdings, previously known as Lumber Liquidators, said Aug. 29 it was pivoting away from restructuring the company to a total liquidation. The company plans to shutter its 400-store empire and lay off its more than 1,900 employees, according to documents filed with the Securities and Exchange Commission.
“We have actively negotiated with multiple bidders, but these discussions have not resulted in an offer, with the necessary financing, that would maximize the value of LL Flooring,” CEO Charles Tyson said in a letter to customers on the company's website.
“As a result, it is with a heavy heart that we must let you know that we are going to begin the process of winding down LL Flooring’s business and closing all of our stores. This is not the outcome that any of us had hoped for. Since 1993, LL Flooring has been at the forefront of crafting beautiful spaces, supporting customers every step of the way — from finding the right material to arranging safe, expert installation.”
LL Flooring said it would hold liquidation sales for three months nationwide beginning Friday. That will darken some 3.2M SF of retail space across the U.S., CoStar reported, citing data from the real estate firm Retail Specialists. The retailer also struck a deal on Aug. 30 to sell its 995K SF Sandston, Virginia, distribution center to SNA NE for more than $104M, according to an SEC filing.
A group of banks led by Bank of America, assigned as LL Flooring’s debtors in possession when the retailer first filed for Chapter 11 bankruptcy in early August, gave the company a deadline to find an outside buyer, according to documents. LL Flooring received up to $130M in DIP financing at the time, ABF Journal previously reported, and planned to shutter just 90 stores at that point.
Plans changed when no buyer turned up.
LL Flooring is among a growing crowd of retailers that have either filed for bankruptcy this year or are entirely calling it quits, including Rue21, Express and The Body Shop.
Chief Restructuring Officer Holly Etlin said in a bankruptcy court filing that a litany of reasons worked against LL Flooring’s efforts to turn its business around, including “lower levels of home improvements, depressed discretionary spending and the subsiding of the Covid-19 demand bubble for home renovation projects.”
The company was founded in 1993 as Lumber Liquidators and in 2005 was acquired by Boston-based private equity firm TA Associates, which took it public two years later.
But in 2015, the television news program 60 Minutes did an exposé on Lumber Liquidators, accusing the retailer of selling laminate flooring from China with unsafe levels of formaldehyde. That ultimately led to LL Flooring pleading guilty the same year to violating the Lacy Act, illegally importing hardwood flooring from far east Russia and hiding the sources of its flooring, according to the bankruptcy court filing. It later settled with the federal government and with plaintiffs in a class-action lawsuit.
The result hammered Lumber Liquidators’ corporate reputation, forcing the company in 2022 to rebrand as LL Flooring, Etlin said in the filing.
“Low brand awareness following the rebranding has been a limiting factor in driving sales, further exasperating the company’s recent financial difficulties,” she said.
