Christmas items are displayed in a True Value store. True Value Co. has said it plans to layoff 873 workers at facilities in Chicago and McHenry County. (True Value photo)

True Value Co. has announced that it plans to layoff 873 workers in Chicago and two McHenry County locations, beginning next month.

The hardware company has entered into an agreement to sell substantially all of its business operations to Do it Best Corp. , a home improvement industry peer.

True Value has told the state’s Department of Commerce and Economic Opportunity that it plans to layoff workers at its Chicago, Harvard and Cary facilities.

The company said 482 employees at its Chicago retail support center, located at 8600 W. Bryn Mawr, will be laid off, as well as 243 workers at its distribution center in Harvard and 148 employees at its manufacturing facility in Cary.

The layoffs are scheduled to begin Dec. 14.

All three True Value facilities may be closed as the company seeks to emerge from Chapter 11 bankruptcy proceedings, according to the company.

The company told the state the layoffs will be permanent.

State law requires that employers with 75 or more full-time employees to provide 60 days advance notice of pending plant closures or mass layoffs.

In its deal with Do it Best, True Value will continue its day-to-day operations, serving r4,500 independently owned retailers.

“After a thorough evaluation of strategic alternatives, we determined that the sale of our business was the path forward to maximize value and best serve our retail partners and other stakeholders into the future,” said Chris Kempa, True Value’s chief executive officer. “We believe that entering the process with an agreed offer from Do it Best, who has a similar decades-long history in the home improvement space and also operates with a focus on supporting members and helping them grow, is the most beneficial next step for True Value and our associates, customers, and vendor partners.

“We thank these valued stakeholders for their continued loyalty as we work to secure a stronger future for True Value.”

True Value’s sale process is the next step in a series of actions that the company has taken in 2024 to better position the business and its brand for the long term, including modernizing its legacy operations, driving greater efficiencies, and investing in additional marketing campaigns, Kempa said.

“A successful acquisition of True Value assets would represent a strategic milestone for Do it Best and home improvement retailers around the world,” said Dan Starr, Do it Best president & chief executive officer. “Do it Best has a proven track record of driving profitability through the most efficient operations in the industry.

“This acquisition, if consummated, would provide True Value and independent hardware stores the strongest opportunities for growth for years to come.”

The agreement with Do it Best, which was reached following a marketing process, provides cash consideration and assumption of liabilities related to the ongoing business. The company is requesting designation of Do it Best as the “stalking horse,” or lead, bidder and to initiate a competitive bidding process under Section 363 of the Bankruptcy Code designed to achieve the highest or otherwise best value for the company. To support the day-to-day business through the sale, the company is seeking to use its cash collateral to fund operations. To the extent True Value requires additional financing during the process, the company has received a commitment from Do it Best to provide incremental capital.

The company is also filing with the Bankruptcy Court a series of customary motions seeking to uphold its commitments to its stakeholders during the process. The “first day” motions include requests to continue to pay wages and provide benefits to associates in the ordinary course and offer essential customer programs. The company anticipates paying vendors in the ordinary course for authorized goods received and services rendered after the filing.

The company is targeting completion of the sale process by year’s end.

True Value stores are independently owned and are not a part of the Chapter 11 proceedings, with the exception of one company-owned store in Palatine.

– kbeese@chronicleillinois.com