LL Flooring to Close All Stores and Lay Off Employees in Full-Scale Liquidation

Henrico-based retailer LL Flooring, formerly known as Lumber Liquidators, has announced its decision to close all of its nearly 400 stores and lay off its approximately 2,000 employees. Just two weeks after seeking bankruptcy protection, LL Flooring has pivoted to a full-scale liquidation, abandoning its previous plans to find a buyer to keep the chain afloat.

The company, which had initially intended to shutter about a quarter of its stores and seek a potential buyer for the remaining ones, now expects store closing sales to commence this week and aims to have all stores closed within the next 12 weeks. Last week, layoff notices were issued to a large portion of the local workforce, including 300 workers at its Libbie Mill headquarters and 119 employees at its distribution center in Sandston.

In a letter addressed to customers and vendors, LL Flooring expressed their disappointment with the outcome and stated, "We have been working hard to pursue a going-concern sale of LL Flooring. We have actively negotiated with multiple bidders, but these discussions have not resulted in an offer, with the necessary financing, that would maximize the value of LL Flooring. As a result, it is with a heavy heart that we must let you know that we are going to begin the process of winding down LL Flooring's business and closing all of our stores."

The decision to proceed with a full liquidation rather than selling to a potential buyer who could salvage the brand and stores took some interested parties by surprise. One such potential buyer is F9 Investments, run by LL Flooring's founder and former CEO Thomas Sullivan, who filed a motion in bankruptcy court to halt the liquidation process and allow for another bid to potentially save parts of LL Flooring. F9 Investments had proposed an asset purchase plan valued at approximately $66 million, aiming to retain 219 stores and preserve 750-1,000 jobs. However, this offer was rejected by LL Flooring.

If approved by the bankruptcy court, the liquidation of LL Flooring would mark the end of a company that originated in New England in 1994 and went public in 2007. The company faced various challenges in recent years, including a damaging "60 Minutes" exposé in 2015 regarding unsafe levels of formaldehyde in its imported flooring from China and pleading guilty to federal environmental crimes related to imports from the Russian Far East. These incidents significantly tarnished the company's reputation, leading to a rebrand and the introduction of the LL Flooring name in 2022, which unfortunately did not resonate with consumers.

LL Flooring's financial struggles have been evident in its declining stock price and recurring offers from prospective buyers that were turned down. The company's ability to operate was uncertain due to cash shortages and restricted borrowing capabilities. In its recent bankruptcy filings, LL Flooring reported total assets of $501 million, total debts of $416 million, and only $8 million in cash.

The company's closure will also result in the end of its publicly traded stock, which is currently trading at a meager $0.02 per share. As part of the liquidation plan, LL Flooring's most valuable remaining asset is its 1 million-square-foot distribution center in Sandston, which is close to being sold for $104 million to an entity associated with QTS, a major player in the data center industry.

The sale of the distribution center is expected to be finalized on September 30, according to court records. As LL Flooring moves forward with its liquidation plan, its customers and employees are left with the unfortunate reality of witnessing the closure of a company that was once a prominent name in the flooring industry.