Specializing in hardwood flooring, LL Flooring has experienced declining sales over the past year as homeowners cut back on remodeling projects. Under Chapter 11 bankruptcy protection, the company aims to restructure its finances and is currently in discussions with several prospective buyers. LL Flooring has assured customers that it will fulfill all existing orders while undergoing this reorganization.
Filing for Chapter 11 bankruptcy provides LL Flooring with legal protections to allow it to continue operations while it devises plans to cut costs and renegotiate debts. Among these plans, LL Flooring has already announced that it will close 94 of its 442 stores in 47 states as part of a strategy to cut operating costs, lessen debts and attract potential buyers. (Related: BANKRUPTCY BOOM: U.S. saw 70 major bankruptcies in just 4 months, the third worst start of year since 2000.)
Tom Sullivan founded the company, then known as Lumber Liquidators, in 1994 after purchasing surplus wood and selling it at a discount.
Initially operating out of a pickup truck in Stoughton, Massachusetts, Sullivan later negotiated directly with mills to reduce costs and undercut competitors. By 2014, celebrating two decades in business, Sullivan remarked on the company's growth from a small operation to a major player in the flooring industry, having served over two million customers.
Sullivan departed from the company in 2017 and has since had disputes with the board, including unsuccessful attempts to regain control. In 2020, Lumber Liquidators was rebranded as LL Flooring.
LL Flooring's bankruptcy shows "retail apocalypse" is still ongoing
The company's troubles are part of a larger "retail apocalypse," with many stores grappling with reduced consumer spending and tightening margins. In the first four months of 2024 alone, nearly 2,600 store closures were reported, and the total could approach 8,000 by year's end.
Retail giants are also scaling back: Walmart has closed three underperforming stores, and Best Buy shut 10 in March. Dollar stores have been significantly impacted, with 99 Cents Only announcing the closure of all 371 of its locations in California, Texas, Arizona and Nevada.
Family Dollar and Dollar Tree are set to close 1,000 stores over the next three years.
Express filed for bankruptcy in April and shut down 95 Express outlets and all UpWest stores. Rue21, a mall staple, will close all 543 of its U.S. stores after declaring bankruptcy. Badcock Home Furniture & More, which fell into bankruptcy earlier this year, is closing all 380 of its stores in the South.
Recently, Big Lots announced it will shutter 315 stores across various states due to worsening financial conditions.
In 2023, U.S. bankruptcy filings increased by 18 percent to 445,186, due to higher interest rates, stricter lending standards, and the expiration of pandemic-era financial aid. Commercial Chapter 11 filings rose 72 percent to 6,569, while consumer filings grew 18 percent to 419,055.
Bankruptcy numbers are projected to rise further this year, though they remain below pre-pandemic levels.
Watch this video from John Williams discussing in detail all the major retailers who are shutting down physical stores and firing thousands of employees.
This video is from the channel ThisIsJohnWilliams on Brighteon.com.
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