LL Flooring Shuts Down After Filing for Bankruptcy

Retailer LL Flooring is officially closing its curtains.

After filing for Chapter 11 last month and then failing to secure a buyer, the Virginia-based company has moved away from restructuring to a total liquidation, Bisnow reported. As part of that process, LL Flooring will shut down its more than 400 stores and lay off more than 1,900 employees, according to an Aug. 29 filing with the Securities and Exchange Commission (SEC).

“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,” President and CEO Charles Tyson said in a letter to customers. “This is not the outcome that any of us hoped for.”

The company’s stores and website will remain operating as it conducts store going-out-of-business sales and the “overall wind-down process,” Tyson added. Closing sales started Friday and will continue over the next 12 weeks, with exact store closings varying from location to location, according to LL Flooring.

That’s set to send retail vacancy rates skyrocketing across the U.S., with LL Flooring’s 3.2 million square foot retail footprint set to come onto the market, according to CoStar Group data.

And the retailer has already been dropping assets in the wake of its bankruptcy, with LL Flooring signing a deal last month to sell its 995,000-square-foot distribution center in Sandston, Va., for over $104 million, Bisnow reported, citing an SEC filing.

When the retailer filed for bankruptcy last month after reporting nearly $110 million in long-term debt, a group of lenders, including Bank of America (BAC), provided $130 million in financing to fund the business’s operations during Chapter 11 proceedings, along with a deadline to find a buyer.

LL Flooring was unable to secure a buyer and will now close its doors after 30 years in business. The company opened as Lumber Liquidators in 1994.

Chief Restructuring Officer Holly Etlin said in a bankruptcy court filing that “lower levels of home improvements, depressed discretionary spending and the subsiding of the COVID-19 demand bubble for home renovation projects” contributed to why LL Flooring could not turn its business around.

Etlin also said in the filing that “low brand awareness” following LL Flooring’s rebranding from Lumber Liquidators “has been a limiting factor in driving sales, further exasperating the company’s recent financial difficulties.”

Tyson ended his letter by saying the company has been “proud to serve [its] customers over the years” for their flooring needs.

Isabelle Durso can be reached at idurso@commercialobserver.com.