LL Flooring, the specialty flooring retailer formerly known as Lumber Liquidators, filed for voluntary Chapter 11 reorganization proceedings and announced the shuttering of 94 stores as it pursues a going-concern sale of its business.
The stores will remain open in the interim, hosting “closing sales.” In addition, the provider of hard and soft surface flooring said it will continue to serve customers at more than 300 retail stores across the U.S.
Charles Tyson, president and CEO of LL Flooring, said initiating Chapter 11 proceedings “is the best path forward” for the company during what he described as challenging macro-economic times. “[This] 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.”
The retailer said it remains in active negotiations with several bidders and hopes to seek approval from the bankruptcy court for a sale of the company in the next few weeks.
In the meantime, LL Flooring intends to pay vendors and suppliers in full under normal terms for goods and services provided on or after the Chapter 11 filing date and has requested court approval to do so.
According to an 8K filing, board members Tom Sullivan, Jason Delves and Jill Witter tendered their resignations on Aug. 8, effective immediately.
Sullivan founded Lumber Liquidators in 1984. He was at the helm in March 2015 when the company came under scrutiny after a “60 Minutes” report found some of its laminate contained dangerous levels of formaldehyde. In 2019, Lumber Liquidators agreed to pay $33 million in fines for misleading investors about levels of the chemical in its Chinese-made laminate flooring.
Last year, Sullivan acquired 9.4% of LL stock for the purpose of beginning discussions with LL management board about merging the stores with Cabinets To Go, another business founded by Sullivan. That deal, among others, never came to fruition.
Industry reaction
Some flooring observers view LL Flooring’s Chapter 11 filing as merely the latest chapter in an ongoing saga of unfortunate events. As Jeff Striegel, president of top 20 distributor Elias Wilf, Owings Mills, Md., explained: “What seems mighty crazy about LL filing Chapter 11 is they had viable options with buyout offers starting with Live Ventures at $5.85 [per share] back in October 2023, then another offer in November from F9 investments from prior owner Tom Sullivan, then another offer in May 2024 as a [last-ditch] offer again from F9 investments, at which time they were running out of cash and decided to sell their real estate at the company’s main headquarters. It appears to be very bad judgment on their part.”
Striegel added that LL Flooring never fully recovered from the “60 Minutes” piece. “The name change from Lumber Liquidators to LL Flooring and last-minute efforts to add carpet just wasn’t enough to capture consumers back,” he said.
Olga Robertson, president of the FCA Network, Shorewood, Ill., said what impacted LL more than the formaldehyde scandal was the exit of founder Tom Sullivan. “It started going downhill after that and then other challenges like COVID-19, etc.,” she said. “It’s difficult to rebrand yourself from a Lumber Liquidators to LL Flooring. It’s just not the same.”
Eleven of the 94 stores that are closing, according to Robertson, are “situated everywhere we have a store, so I’m not going to lose any sleep over it.”
