LL Flooring Files Bankruptcy, Will Close 94 Stores
LL Flooring has announced that it will close 94 stores in more than 30 states as it filed for chapter 11 bankruptcy. The company, formerly known as Lumber Liquidators, said that it is nearly $110 million in long-term debt in filings made in Delaware bankruptcy court on Sunday. The Richmond, Virginia-based company said in the filings that slowing home sales and rising interest rates contributed to slower sales in the home improvement market. The company's 300 other stores will remain open. LL Flooring said in the filings that it has attempted to find a buyer but is willing to solicit offers to close more stores if one cannot be found.
Total Retail's Take: It's a challenging time for retailers in the home improvement sector, exemplified by LL Flooring's bankruptcy filing earlier this week. A combination of high interest rates and economic uncertainty have left consumers more cautious about spending on larger home improvement projects. In its quarterly earnings report on Tuesday, The Home Depot forecasted that sales will be weaker than expected in the back half of the year.
“Pros tell us that, for the first time, their customers aren’t just deferring because of higher financing costs,” Richard McPhail, The Home Depot's CFO, told CNBC. “They’re deferring because of a sense of greater uncertainty in the economy.”
For LL Flooring, its future concerns do not lie in consumer sentiment, like The Home Depot's do, but rather in its ability to find a buyer.
