True Value, a well-known hardware store chain with a 75-year history, has declared bankruptcy and announced plans to sell most of its operations to rival company Do it Best. This move comes as the company faces financial difficulties amid a slowdown in the housing market and increased competition from larger rivals such as Home Depot and Lowe’s.

In a press release on Monday, True Value revealed that it will continue daily operations at its 4,500 independently operated stores during the Chapter 11 bankruptcy process. The stores themselves are not part of the bankruptcy proceedings, ensuring they will remain open. The company also disclosed a $153 million “stalking horse” bid from Do it Best, a member-owned wholesaler specializing in hardware, lumber, and home goods.

True Value’s financial problems were attributed to a “significant cash issue,” exacerbated by a downturn in the housing market and changes in consumer spending habits. Many customers have become more selective about discretionary purchases, particularly in the hardware sector. Despite facing similar market challenges, larger competitors like Home Depot and Lowe’s remain in stronger financial positions.

True Value’s CEO, Chris Kempa, stated that the decision to sell the business was made after a thorough evaluation of strategic options, with the goal of better serving its retail partners and stakeholders.

Do it Best CEO, Dan Starr, expressed optimism about the acquisition, stating that the agreement would provide growth opportunities for True Value and independent hardware stores. The sale is expected to be finalized by the end of 2024, unless a better offer emerges.