Update: LL Flooring signs last-minute deal to sell itself to company founder
LL Flooring has reversed course, with some stores to remain open under a new owner.
Less than a week after the specialty retailer of hardwood flooring (formerly known as Lumber Liquidators) said it was going out of business and liquidating its assets as efforts to find a buyer failed, the company is not going dark after all — at least not entirely. The bankrupt retailer said it has signed an agreement with Miami-based private equity firm F9 Investments for a “going-concern” sale of its business.
F9, which is LL Flooring's largest shareholder, is run by Thomas Sullivan, who founded the company as Lumber Liquidators in 1994. He left in 2016 following a “60 Minutes” report in 2015 related to claims of unsafe levels of formaldehyde in flooring it had imported from China. The report, which led to class-action lawsuits, proved damaging to the brand, which changed its name to LL Flooring in 2022.
Under the terms of the asset purchase agreement, F9 will acquire 219 of LL Flooring's approximate 400 stores along with the inventory in those stores and in the company’s distribution center in Sandston, Va. It also will acquire LL’s intellectual property and other company assets. The firm has put up a deposit of $4.1 million in cash, according to court documents.
The deal is expected to be completed by the end of September, subject bankruptcy court approval.
“We are pleased to have reached this agreement with F9 Investments for a going-concern sale following significant efforts by our team and advisors to preserve the business and maintain ongoing operations," said Charles Tyson, president and CEO of LL Flooring. “As we move through the court-supervised process toward the approval and completion of this transaction, we remain committed to continuing to serve our valued customers and working closely with our vendors and partners.”
The 219 LL Flooring stores that are part of the asset purchase agreement, along with the company’s online platform, are open and continuing to serve customers with few changes to store operations and policies, according to an LL statement.
LL Flooring also said it will continue to work with Hilco Merchant Resources to assist the company in store closing sales at 211 of its locations, including the recently initiated 117 store closings and the 94 store closings already in process that had been previously announced in August. The locations will remain open through the store closing process.
Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel, Houlihan Lokey is serving as financial adviser, and AlixPartners LLP is serving as restructuring advisor to the company.
