Lowe's Shuts down Bankrupt California Hardware Chain
The hardware supplier, Orchard Supply Hardware, started 87 years ago in 1931, will be serving its last customers in California, Florida, and other states in 2018. Orchard Supply began as Orchard Supply Farmer Co-op, a modest co-op formed by 30 farmers based in the San Jose, California area. Orchard was started and thrived in the midst of the Great Depression, but after struggling through rocky financial health over the last eight years it could no longer compete with larger stores.
White Knight: Lowe's
Orchard Supply was in deep financial trouble at the start of 2013 and mid-year filed for Chapter 11 bankruptcy protection with the US Bankruptcy Courts in California. At the time of the announcement, the company also announced that it would sell its highest valued assets, including around 95 of the highest profit generating stores to Lowe's Home Improvement Stores. The company remained a separate brand within the home improvement store's portfolio.
Shutting down California Chain
On August, 21st 2018, Orchard Supply Hardware employees were notified that the company will begin closing all its stores nationwide beginning this week with the store closure plan expected to be completed by the end of the fiscal year. Lowe's CEO, Marvin Ellison mentioned that the impact of the store closures makes the decision a difficult one, but a decision necessary for the company to focus on its home improvement business. At the end of the day, the Orchard's $600 million sales contributions last year, amounted to less than 1% of Lowe's overall sales.
For customers looking for good deals on hardware supplies, Orchard Supply will begin store closing sales starting immediately with everything in Bay Area Stores being heavily discounted in order to liquidate store inventory. In typical liquidation sales, the 99 Orchard Supply Hardware stores will likely increase the percentage of discounts as time goes on.
Sacramento Business Bankruptcy
There comes a time in the life of a business where it must overcome financial adversity and Chapter 11 was enacted in order to deal with these issues and save the business. It's often true that the economy, business owners, and customers are all better off when companies are able to reorganize debt and stay in business. However, this isn't always the case and, in some cases, it is more sensible to close down the business to focus on new ventures. Contact a bankruptcy lawyer in Sacramento if restructuring your debt would benefit your company, as well as, your customers.