LL Flooring, once known as Lumber Liquidators, has pulled off a surprising turnaround. The company, which was on the brink of closing all its stores, has found a buyer at the eleventh hour.
F9 Investments, a private equity firm owned by Lumber Liquidators’ founder Tom Sullivan, has agreed to buy a large chunk of the struggling retailer.
This deal, expected to close by September’s end, will keep 219 stores open and save a Virginia distribution center from shutting down.
It’s not all rosy, though. Another 211 LL Flooring stores are still set to close their doors for good.
This includes 117 locations that recently started the closing process and 94 others that were already winding down when the company filed for bankruptcy on August 11.
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Charles Tyson, LL Flooring’s CEO, seemed relieved when announcing the deal. “We’re glad to have reached this agreement with F9,” he said. Tyson promised that the company would keep serving customers and working with vendors as the deal goes through bankruptcy court.
Tom Sullivan, the man behind the rescue, has big plans. “We’re bringing back the yellow and black,” he told reporters, referring to the original Lumber Liquidators branding.
In a sudden pivot after announcing a complete closure of the business last week, LL Flooring announced that Lumber Liquidators founder Tom Sullivan is buying some of the company after all. Read more here ➡ https://t.co/Msq9gZ2Ebd pic.twitter.com/EqcJXtqHOX
— Wood Floor Business (@WFBusinessMag) September 9, 2024
Sullivan aims to strip away the complexities that he believes bogged down the business. “It’s not about fancy offices,” he said. “It’s about great people in our stores who know flooring.”
Sullivan’s game plan is straightforward: offer fewer, but more popular, flooring options. This might mean big sales as the stores clear out old inventory. He’s also planning to team up with Cabinets To Go, another company he owns, to cut shipping costs.
This deal marks a full circle for Sullivan, who started Lumber Liquidators back in 1993.
The company grew from a small shop in Massachusetts to a nationwide chain before changing its name to LL Flooring in 2022.
But the road hasn’t been smooth. In 2015, a “60 Minutes” report claimed some of the company’s flooring had dangerous levels of formaldehyde. This led to a $36 million settlement in 2017.
More recently, high mortgage rates and housing prices have hit the company hard. Last year, sales dropped by 18.5%.
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The numbers paint a stark picture. When LL Flooring filed for bankruptcy, it owed over $416 million, with assets just over $501 million. It’s clear the company needed a lifeline.
