Home Depot Rival Files For Bankruptcy Chapter 11: LL Flooring in Trouble

Here’s a detailed breakdown of what’s happening, why it matters, and how it could impact shoppers, employees, and the broader market.

Why Did LL Flooring File for Bankruptcy?

LL Flooring (formerly Lumber Liquidators) has been struggling for years, but several key factors pushed it over the edge:

1. Mounting Debt & High Interest Rates

   • The company took on significant debt during expansion, and rising interest rates made repayments unsustainable.

   • By mid-2024, LL Flooring’s stock had plummeted 86% compared to Home Depot’s 4% growth over the same period.

2. Declining Sales & Consumer Spending Shifts

   • Sales dropped 22% in Q1 2024, with an operating loss of $28 million.

   • Consumers are cutting back on big-ticket home renovations, opting for smaller, essential purchases instead.

3. Supply Chain & Vendor Issues

   • The company stopped paying some vendors, leading to 80% of its annual shipments being disrupted.

   • Tariffs on imported flooring materials further squeezed profit margins.

4. Failed Takeover Attempts

   • Multiple buyout offers (including one from founder Tom Sullivan’s F9 Investments) were rejected, leaving the company without a financial lifeline.

What Chapter 11 Bankruptcy Means for LL Flooring

Unlike a Chapter 7 liquidation, Chapter 11 allows LL Flooring to restructure its business while staying operational. Here’s what’s happening:

• Store Closures: 94 stores are shutting down immediately, with liquidation sales underway 39.

• Debt Restructuring: The company aims to wipe out $100M–$500M in liabilities while keeping assets worth $500M–$1B.

• Potential Sale: LL Flooring is negotiating with multiple bidders, hoping for a going-concern sale by late August 2024.

• $130M Emergency Funding: Bank of America provided debtor-in-possession (DIP) financing to keep remaining stores open.

Will LL Flooring Survive?

It’s uncertain. If no buyer emerges, the company could liquidate entirely, following the path of Bed Bath & Beyond. However, if a buyer steps in (possibly a private equity firm), LL Flooring may re-emerge as a smaller, restructured business.

List of Store Closures

LL Flooring is closing 94 locations nationwide, including:

• California: San Jose, Tustin, Pasadena

• New York: Rego Park, Bronx

• Florida: North Miami

• New Jersey: Middletown, Princeton

A full list is available on the company’s bankruptcy case website.

How This Affects Shoppers

If you’re an LL Flooring customer, here’s what to expect:

✅ Gift Cards & Warranties – Should still be honored during restructuring 1.
✅ Clearance Sales – Closing stores are offering deep discounts on flooring inventory.
⚠️ Fewer Physical Locations – Some areas will lose access to LL Flooring stores.
⚠️ Potential Online Shift – If the brand survives, it may focus more on e-commerce.

The Bigger Picture: Why Home Improvement Retailers Are Struggling

LL Flooring isn’t alone. Other home goods retailers facing financial turmoil include:

• Big Lots (closing 25% of stores)

• Conn’s HomePlus (liquidating all stores)

• Mitchell Gold + Bob Williams (bankrupt in 2023)

Key Industry Challenges:

1. Post-Pandemic Slowdown – The home renovation boom has faded.

2. High Interest Rates – Making debt refinancing difficult.

3. Competition from Home Depot & Lowe’s – Their scale and Pro customer focus give them an edge.

FAQs About LL Flooring’s Bankruptcy

1. Will LL Flooring stores stay open?

• Yes, but only about 206 locations will remain after the 94 closures.

2. Can I still use my LL Flooring gift card?

• Yes, the company states that gift cards and warranties will be honored.

3. What happens to LL Flooring employees?

• Workers at closing stores face layoffs, but most employees will keep their jobs for now.

4. Is LL Flooring the same as Lumber Liquidators?

• Yes, the company rebranded in 2021 after a formaldehyde scandal in 2015.

5. Could Home Depot buy LL Flooring?

• Unlikely. Home Depot is more focused on organic growth and Pro customers rather than acquiring distressed rivals.

What’s Next for LL Flooring?

• August 26, 2024 Deadline – If no buyer steps in, liquidation may begin.

• Possible Rebranding – Founder Tom Sullivan has expressed interest in reviving the Lumber Liquidators name if he regains control.

• Market Share Shift – Competitors like Floor & Decor and Home Depot could benefit from LL Flooring’s decline.

Key Takeaways

• LL Flooring’s bankruptcy is a sign of broader retail struggles, not just an isolated case.

• 94 stores are closing, but the brand may survive if a buyer emerges.

• Shoppers should expect discounts at closing locations but fewer store options long-term.

• Home Depot remains dominant, while smaller retailers face an uphill battle.

Final Thoughts

LL Flooring’s bankruptcy is a cautionary tale for mid-sized retailers in a market dominated by giants like Home Depot. For consumers, it means short-term bargains but long-term uncertainty. For the industry, it’s a reminder that debt-heavy expansion and weak differentiation can be fatal in today’s retail climate.

Keep an eye on how this unfolds—it could reshape where you buy your next hardwood floor.

(For further details, check LL Flooring’s official bankruptcy case page or follow updates from credible financial sources.)