LL Flooring to Cease Operations

Richmond, VA, September 4, 2024-"LL Flooring is going completely out of business,” reports Richmond Biz Sense.

“Two weeks after the Henrico-based retailer sought bankruptcy protection to shutter about a quarter of its stores and find a buyer that might keep the rest of the chain afloat, it has now pivoted into a full-scale liquidation.

“This means the company formerly known as Lumber Liquidators will in short order close all of its nearly 400 stores and lay off its nearly 2,000 employees.

“Layoff notices for much of its local workforce were issued last week for 300 workers at its Libbie Mill headquarters and for 119 employees at its massive distribution center in Sandston.

“The company said in bankruptcy court and SEC filings in recent days that it expects store closing sales to begin this week with the hope of having all stores shuttered in 12 weeks.

“In a letter to customers and vendors this week, the publicly traded company said, ‘this is not the outcome that any of us had hoped for.’

‘We have been working hard to pursue a going-concern sale of LL Flooring. 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. 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,’ it wrote.

“The pivot isn’t a complete surprise, as the company had said some form of a sale of most of its assets was the plan all along. However, the speed at which it flipped to a full liquidation rather than selling to a buyer who might keep the brand and remaining stores intact took at least some interested parties by surprise.

“Indeed, one of those potential buyers is protesting the liquidation plan. F9 Investments, a firm run by LL Flooring founder and former CEO Thomas Sullivan, filed a motion in bankruptcy court on Tuesday to try to put a stop to the process and allow time for F9 to make another bid to buy and salvage what’s left of LL.

“‘Instead of providing an open, transparent and meaningful opportunity for the evaluation of these going concern bids and an auction that would maximize value and save jobs, the Debtors proposed a flawed process that attempted to chill bidding and now seeks to liquidate the Debtors’ business without transparency,’ F9 said in its filing. ‘The Debtors’ actions run afoul of basic principles of any bankruptcy process.’

“F9 had initially sought an asset purchase plan valued at roughly $66 million, through which it would have kept 219 of the chain’s stores and retained 750-1,000 employees. However, that offer was rejected by LL.

“F9 is also LL’s largest landlord and shareholder, though the shares are now nearly worthless. They closed at $0.02 apiece on Tuesday, putting the company’s market cap at $462,000.

If approved by the bankruptcy court, the liquidation would mark the end of a company that began in New England in 1994, when Sullivan started it as Lumber Liquidators. It went public in 2007 after being owned by a private equity firm and relocating its corporate headquarters to Toano, Virginia.”

In addition, Virginia Business reports, “LL Flooring has sold its eastern Henrico County distribution center to a limited liability company for $104.75 million, according to documents the Henrico-based flooring company filed with the Securities and Exchange Commission on Tuesday.”