LL Flooring plans to liquidate and close 400 stores

A national flooring retailer is throwing in the towel after failing to find a buyer during its bankruptcy.

An LL Flooring location in Duluth, Georgia

LL Flooring Holdings, formerly known as Lumber Liquidators, announced on Aug. 29 that it was moving away from a restructuring of the company and was now going into full liquidation. The company plans to close its 400-store empire and lay off more than 1,900 employees, according to documents filed with the U.S. Securities and Exchange Commission.

“We have actively negotiated with several bidders, but these discussions have not resulted in an offer with the necessary financing that would maximize the value of LL Flooring,” CEO Charles Tyson said in a letter to customers on the company’s website.

“It is with a heavy heart that we announce that we are beginning to wind down LL Flooring’s operations and will be closing all of our stores. This is not the outcome we had hoped for. Since 1993, LL Flooring has been a pioneer in creating beautiful spaces and supporting customers every step of the way – from finding the right material to arranging a safe, professional installation.”

LL Flooring said it will hold three months of liquidation sales nationwide starting Friday, which will result in the loss of about 3.2 million square feet of retail space in the U.S., CoStar reported, citing data from real estate firm Retail Specialists. The retailer also entered into a deal to sell its 995,000-square-foot distribution center in Sandston, Virginia, to SNA NE for more than $104 million on Aug. 30, according to an SEC filing.

A group of banks led by Bank of America, which took ownership of LL Flooring when the retailer first filed for Chapter 11 bankruptcy in early August, gave the company a deadline to find an outside buyer, according to documents. LL Flooring received up to $130 million in DIP financing at the time, ABF Journal previously reported, and at the time only planned to close 90 stores.

The plans changed when no buyer was found.

LL Flooring is one of a growing number of retailers that have either filed for bankruptcy or gone out of business entirely this year, including Rue21, Express and The Body Shop.

In a bankruptcy filing, Chief Restructuring Officer Holly Etlin said LL Flooring’s efforts to turn the business around were hampered by a number of factors, including “lower home renovation activity, lower spending on nonessential household items and the dissipation of the Covid-19 demand bubble for home renovation projects.”

The company was founded in 1993 as Lumber Liquidators and was acquired in 2005 by Boston-based private equity firm TA Associates, which took it public two years later.

But in 2015, the television news program 60 minutes published an expose on Lumber Liquidators, accusing the retailer of selling laminate flooring from China with unsafe formaldehyde levels. This ultimately led to LL Flooring pleading guilty that same year to violating the Lacy Act, illegally importing hardwood flooring from Russia’s far east and concealing the origins of its flooring, according to its bankruptcy filing. The company later settled with the federal government and with plaintiffs in a class action lawsuit.

The result damaged Lumber Liquidators’ reputation and forced the company to change its name to LL Flooring in 2022, Etlin said in the filing.

“Low brand awareness following the rebranding was a limiting factor in increasing sales and exacerbated the company’s recent financial difficulties,” she said.