LL Flooring does about-face after securing 11th-hour buyer; will keep some stores

NEW YORK (AP) — After securing a last-minute buyer, LL Flooring is reversing course on shutting down all of its stores.

The hardwood flooring retailer formerly known as Lumber Liquidators signed an agreement with private equity firm F9 Investments on Friday afternoon for a sale of its business. Under terms of the deal, expected to close by the end of September, F9 will acquire 219 stores and a Virginia distribution center — as well as LL Flooring's intellectual property and other assets.

Another 211 LL Flooring stores are still set to close, however. That includes 117 locations where closings were recently initiated and 94 others that were already in the process when the Virginia company filed for Chapter 11 bankruptcy protection on Aug. 11.

Just weeks after filing for Chapter 11, LL Flooring said it would be “winding down operations” and closing all of its stores after failing to find a buyer in negotiations. The retailer expected the process to take about 12 weeks.

But that changed after a deal was reached with F9 on Friday. In a statement, LL Flooring president and CEO Charles Tyson said the company was “pleased to have reached this agreement” with F9 “following significant efforts by our team and advisors to preserve the business.”

Tyson added that LL Flooring remains “committed to continuing to serve” customers and vendors as the transaction moves through bankruptcy court for approval.

F9, based in Miami, is owned by Tom Sullivan, who founded Lumber Liquidators over 30 years ago. Sullivan told The Associated Press that the 219 stores set to be purchased by F9 will open under the Lumber Liquidators name again.

“We’ll be getting back to basics,” Sullivan said. “Basically, yellow and black is coming back ... We know what worked before. It’s not fancy offices in Richmond with 200 people that didn't know the flooring business. It’s great people in our stores that know flooring (and) customers that want a great deal and know Lumber Liquidators is the place to go.”

Sullivan explained that the company plans to narrow down to a more “manageable” selection of flooring options and get rid of material that feels duplicative or doesn't sell well, so customers will likely see big discounts on much of the inventory left behind from LL Flooring's bankruptcy process. He added that the company will be closely aligned with Cabinets To Go, another F-9-owned brand he founded, to help with shipping efficiency.

Lumber Liquidators got its start in 1993 as a modest operation in Massachusetts and later expanded operations nationwide. The brick-and-mortar retailer officially changed its name to LL Flooring at the start of 2022.

The company previously faced turmoil after a 2015 segment of “60 Minutes” reported that laminate flooring it was selling had illegal and dangerous levels of formaldehyde. Lumber Liquidators later said it would stop selling the product and agreed to pay $36 million to settle two class-action lawsuits in 2017.

LL Flooring has had difficulty turning a profit in recent years. Net sales fell 18.5% in 2023, according to a recent earnings report, amid declines in foot traffic and weak demand with mortgage rates and housing prices high. In its Chapter 11 filing, LL Flooring disclosed that total debts amounted to more than $416 million as of July 31, compared with assets of just over $501 million.

Ahead of filing for bankruptcy, LL Flooring also entered a proxy battle over the summer — centered on attempts to keep Sullivan, who had tried to acquire the business before, off the board. In June, company leadership wrote a letter urging shareholders to vote for other nominees, accusing Sullivan of “pushing a personal agenda.” But LL Flooring later confirmed that the founder and F9's other nominees were elected at its annual shareholder meeting in July.