Chicago-based hardware retailer True Value, which filed for Chapter 11 bankruptcy last week, could lay off nearly 900 employees in Illinois alone if the company isn’t sold during bankruptcy proceedings, it said in mandated state filings.
True Value, which has about 4,500 stores, filed for bankruptcy in federal court in Delaware on Oct. 14. In court filings, the company said Indiana-based competitor Do It Best had offered to buy the company for $153 million.
In filings required by Illinois under the state’s Worker Adjustment and Retraining Notification Act, which mandates advance notice of certain mass layoffs, True Value said about 870 Illinois workers could be out of jobs if the deal with Do It Best doesn’t go through.
“While we remain committed to successfully completing the Chapter 11 sale process, we are notifying you of actions that True Value may need to take if we do not close the proposed sale to (Do It Best) and identify other buyers,” the company’s human resources head, Irma Quintana, wrote to the state last week.
True Value said it could be forced to lay off staff at its 8600 W. Bryn Mawr Ave. offices in Chicago, where it operates a retail support center and where corporate employees are based. The company also said it would have to lay off workers at a manufacturing facility in Cary and at two facilities in Harvard, the majority of whom work as merchandise handlers.
Around 215 of the impacted Illinois True Value workers are members of the International Brotherhood of Teamsters Local 781 who work at the company’s distribution center in Harvard, according to Pasquale Gianni, a spokesperson for Teamsters Joint Council 25, an umbrella organization of Teamsters locals that includes Local 781.
Gianni said the Teamsters are currently in talks, which he described as “ongoing and productive,” with True Value’s potential buyer regarding the preservation of jobs in Harvard.
True Value, which did not respond to requests for comment about the layoffs, said in a news release last week that True Value retail stores were not part of the bankruptcy proceedings because they are independently owned, with the exception of one company-owned store in suburban Palatine. The company has 10 locations in Chicago.
As part of the proposed deal, Do It Best agreed to assume certain liabilities as part of the deal, including up to $45 million in administrative claims. The company also agreed it would hire some of True Value’s employees as part of the deal, though court filings did not specify how many.
“The Debtors believe that the proposed transaction will maximize value for their stakeholders, preserving many jobs and a nearly century-old national brand,” True Value said in court filings.
The layoffs in Illinois represent close to half of the company’s total workforce. In court filings, True Value said it employed 1,950 people in total, with around 1,300 working in warehouse, distribution and manufacturing roles.
“Do it Best has a proven track record of driving profitability through the most efficient operations in the industry,” the company’s CEO, Dan Starr, said in a statement last week. “This acquisition, if consummated, would provide True Value and independent hardware stores the strongest opportunities for growth for years to come.”
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