As of Sept 6, 2024, LL Flooring, formerly known as Lumber Liquidators, is going out of business after the bankrupt company failed to find a buyer to rescue the 30-year-old retailer.
According to their August 11, 2024 news item posted on their site entitled “LL Flooring Initiates Voluntary Chapter 11 Process”, the company leaders decided to move ahead with filing for bankruptcy stating, “that the Company and certain of its subsidiaries have commenced voluntary Chapter 11 reorganization proceedings in the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). LL Flooring intends to use these proceedings to pursue a going-concern sale of its business.”
Consequently, LL Flooring is set to close down. Starting September 6, clearance sales will kick off at its 200 remaining locations, marking the beginning of a systematic shutdown process expected to last approximately 12 weeks. This closure will unfortunately result in the loss of jobs for about 2,000 employees.
Lumber Liquidators Origins
Initially starting as Lumber Liquidators nearly three decades ago, the company initially focused on buying and reselling surplus flooring stock, including floors, laminate, and newer hybrid core products suitable for a flat subfloor from sources like Home Depot.
As time passed, it expanded its offerings to include around 500 different types of hard-surface flooring, such as laminate, stone look tile, floors designed for a flat subfloor, and newer hybrid core products. By the year 2018, LL Flooring, known for its floors and newer hybrid core products requiring a flat subfloor, had established over 400 store locations across the country, including retail partners like Home Depot, marking the peak of its growth.
LL Flooring aka Lumber Liquidators Situation
Charles Tyson, President and Chief Executive Officer of LL Flooring, said, “After comprehensive efforts to enhance our liquidity position in a challenging macro environment, a determination was made that initiating this Chapter 11 process is the best path forward for the Company.
Today’s step is intended to provide LL Flooring with additional time and financial flexibility as we reduce our physical footprint and close certain stores while pursuing a going-concern sale of the rest of our business.
As we move through this process, we are committed to continuing to serve our valued customers, and to working seamlessly with our vendors and partners. I am appreciative of our associates for their ongoing hard work in providing the best experience for our customers.”
LL Flooring’s Bancruptcy Proses Gets Started
The company, which filed for Chapter 11 just three weeks ago, started closing 94 locations and began searching for a buyer. The retailer previously said it was in “active negotiations with multiple bidders.” However, in a new statement, the company said those “discussions have not resulted in an offer, with the necessary financing, that would maximize the value of LL Flooring.”
LL Flooring said instead that “a sale of the company’s individual assets, holding closing sales at our stores and winding down the business will deliver the most value to its creditors.”
“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,” the company said in a letter to customers. “This is not the outcome that any of us had hoped for.”
Customers’ flooring orders will be fulfilled within 30 days, the company said, but new installation appointments will stop after September 6.
LL Flooring changed its name from Lumber Liquidators in 2021 following a controversial few years.
Headwinds From Past Controversy Over Lumber Liquidators
In 2015, a “60 Minutes” investigation aired an undercover video showing the company’s suppliers saying that they provided the company with hardwood and vinyl flooring products at shop pricing, with formaldehyde that exceeded regulatory standards.
In a settlement reached three years later, Lumber Liquidators agreed to pay $36 million without admitting any fault. This agreement was to resolve lawsuits from customers who purchased their laminate flooring between 2009 and 2015.
In 2019, the Lumber Liquidators firm consented to a $33 million settlement for giving investors false information regarding formaldehyde levels.
The Industry Impact
The shutdown of LL Flooring contributes to the increasing number of familiar retail brands vanishing, a trend attributed to consumers reducing their expenditures on items they don’t absolutely need.
This reason is held responsible for the general situation in similar wood products businesses.
For example, iIn the past year, the furniture industry has faced significant challenges, with Z Gallerie and Mitchell Gold + Bob Williams both entering bankruptcy. Additionally, Wayfair has made substantial cuts to its workforce.
Conn’s HomePlus, a 134-year-old furniture and electronics retailer, recently filed for bankruptcy and is in the process of closing all of its stores. Most recently, Big Lots said it plans to shutter a quarter of its stores.