Who Owns LL Flooring Company?

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Who Owns LL Flooring Company Now?

LL Flooring Company, a specialty retailer, saw its ownership structure significantly change in late 2024. Originally founded as Lumber Liquidators, the company has navigated a complex journey, including rebranding and bankruptcy.

Founder Tom Sullivan, through his firm F9 Investments, reacquired a major part of the business in September 2024. This move brought 219 stores and key assets back under private ownership, reverting to the original Lumber Liquidators name.

The company's history is marked by its founding in 1994 and its eventual public offering. After facing operational challenges and a scandal, it rebranded to LL Flooring in 2022. Despite this, macroeconomic pressures led to a Chapter 11 bankruptcy filing in August 2024. The subsequent reacquisition by Sullivan means the entity now known as LL Flooring is substantially different from its predecessor, with much of its core business now privately held. Understanding this shift is crucial for analyzing its market position and future prospects, as detailed in our LL Flooring PESTEL Analysis.

The journey of LL Flooring began in 1994, founded by Tom Sullivan, a contractor with a vision for accessible flooring. He started by reselling surplus wood from a trucking yard, a humble beginning that set the stage for a significant retail presence. The company officially entered the flooring market with its first dedicated store in 1996, focusing on hardwood.

Founding Vision

Tom Sullivan established the company with a focus on providing high-quality hardwood flooring at competitive prices. This strategy proved successful, driving early customer acquisition and expansion.

Early Operations

The initial operations were lean, with Sullivan personally managing the business. The company's growth was organic, building from a single location to multiple stores within its first few years.

First Store Opening

The company opened its first dedicated flooring store on January 5, 1996, in West Roxbury, Massachusetts. This marked a significant step from its initial surplus wood resale model.

Expansion Strategy

Early expansion involved opening additional retail locations, such as a second store in Hartford, Connecticut, by August 1996. This demonstrated a clear intent to grow the physical footprint.

Initial Ownership Structure

Tom Sullivan was the sole founder and primary owner in the company's nascent stages. Public records do not indicate significant early external investment or complex shareholding structures.

Self-Funded Growth

The company's initial growth appears to have been largely self-funded by Sullivan and his early team. This lean approach allowed for direct control and a focused business development strategy.

In the formative years of the company, Tom Sullivan was the principal owner and driving force behind its operations. The business model was built on direct sales and a specialized product offering, which facilitated organic growth. This period saw the company focus on expanding its retail footprint, a key element in its Growth Strategy of LL Flooring.

Founders and Early Ownership Details

Tom Sullivan, a building contractor, founded the company in 1994. His entrepreneurial spirit led him to start by reselling surplus wood, laying the foundation for a specialized flooring retailer.

• Established in 1994 by Tom Sullivan.
• First store opened in West Roxbury, Massachusetts, on January 5, 1996.
• Initial focus on hardwood flooring at competitive prices.
• Early expansion included a second store in Hartford, Connecticut, by August 1996.
• Tom Sullivan was the primary owner in the early stages.
• No widely reported details of early angel investors or significant external stakes.

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The ownership of LL Flooring has undergone significant transformations, evolving from its inception as a private entity to a public company and, more recently, a partial return to private hands. These shifts have reshaped its corporate structure and stakeholder landscape.

LL Flooring's journey includes a notable transition from its public listing to a new ownership structure following its 2024 bankruptcy filing. This period saw a significant portion of its retail operations reacquired by its original founder, effectively bifurcating the company's ownership.

Key Stakeholders and Ownership Structure

Following the 2024 bankruptcy proceedings, the ownership landscape of LL Flooring has been significantly altered. The core retail business is now primarily under private ownership, while a residual public entity continues to trade on the OTC market.

• F9 Investments, led by original founder Tom Sullivan, is the primary owner of the 219 reacquired stores, which now operate under the Lumber Liquidators brand.
• The remaining LL Flooring Holdings, Inc. entity, which comprises approximately 211 stores slated for closure, is now traded on the OTC Pink market under the ticker LLFLQ.
• As of October 11, 2024, the market capitalization of the publicly traded LLFLQ was approximately $25.86 million.
• Prior to its bankruptcy filing in August 2024, LL Flooring Holdings, Inc. had approximately 30.575 million shares outstanding.
• The company's history includes a public offering in November 2007, which diversified its ownership to include institutional investors and individual shareholders, a structure that has since been fundamentally reshaped. Understanding the Revenue Streams & Business Model of LL Flooring provides context for these ownership changes.

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Following significant ownership shifts in late 2024, the board structure of the company formerly known as LL Flooring Holdings, Inc. underwent substantial changes. The current board composition reflects the acquisition of key operations by F9 Investments, impacting the overall corporate governance and strategic direction.

Prior to the Chapter 11 filing in August 2024, LL Flooring Holdings, Inc. operated with a board of nine directors, with eight being independent. Shareholder voting power was generally based on a one-share-one-vote system. A pivotal moment occurred in mid-2024 with a proxy battle initiated by F9 Investments, led by founder Tom Sullivan, who held a 9.4% stake by May 2023. This led to the election of three F9 nominees to the board at the July 2024 Annual Meeting of Shareholders, signaling a shift in influence. Shareholders also approved declassifying the board, allowing for annual director elections. However, subsequent to the bankruptcy filing and F9 Investments' agreement to acquire a significant portion of the business, the F9-nominated directors resigned on August 8, 2024, and the board was reduced to six members. The former President and CEO, Charles Tyson, also resigned as an officer and director on November 1, 2024. This restructuring established a new governance framework for the acquired operations under F9 Investments, while the remaining public entity, LLFLQ, continues with a reduced board during its wind-down or restructuring phase.

Board Governance Evolution

The board of directors at LL Flooring has seen significant changes, particularly following the 2024 proxy battle and subsequent acquisition activities. This evolution reflects shifts in LL Flooring ownership and corporate control.

• F9 Investments initiated a proxy battle in mid-2024.
• Three F9 nominees were elected to the board in July 2024.
• Board declassification was approved, increasing annual director elections.
• Key F9 directors resigned in August 2024 post-Chapter 11 filing.
• The board size was reduced from nine to six directors.
• Understanding these changes is crucial for grasping the current LL Flooring company owner and its corporate structure. For more on the company's guiding principles, see this article on the Mission, Vision & Core Values of LL Flooring.

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Recent developments have significantly reshaped the ownership landscape of LL Flooring, moving a substantial portion of the business from public trading to private ownership. These shifts follow a period of considerable financial challenges for the company.

The company, which rebranded from Lumber Liquidators in January 2022, experienced a substantial decline in net sales of 18.5% in 2023, resulting in a net loss of $103.49 million. This financial performance was attributed to decreased foot traffic and weaker consumer demand. In response to these headwinds, LL Flooring filed for Chapter 11 bankruptcy protection on August 11, 2024. Initially, a complete liquidation of all 424 stores was planned. However, a significant turn of events saw founder Tom Sullivan, through F9 Investments, acquire 219 stores, inventory, a distribution center, and intellectual property for up to $43 million. These acquired locations are now operating under the Lumber Liquidators brand, with Jason Delves leading the F9 affiliate, F9 Brands. The remaining 211 LL Flooring stores were slated for closure. Consequently, the publicly traded entity, LL Flooring Holdings, Inc., was delisted from the NYSE and now trades over-the-counter as LLFLQ. This transition highlights a trend of founder re-engagement and a move towards private ownership for a significant segment of the business, a notable departure from the typical trend of increasing institutional ownership in stable public companies. The future ownership structure of the remaining LLFLQ entity remains uncertain as it navigates the post-restructuring period.

Founder's Re-Acquisition

Founder Tom Sullivan, via F9 Investments, purchased 219 stores and associated assets. This move brings a significant portion of the business back under private, founder-led ownership.

Brand Reversion and New Leadership

The acquired stores are reverting to the Lumber Liquidators brand. Jason Delves has been appointed CEO of the F9 affiliate managing these locations.

Public to Private Transition

LL Flooring Holdings, Inc. has been delisted from the NYSE and now trades on the OTC Pink market. This signifies a major shift in the company's public ownership status.

Market Performance and Financials

The company faced significant financial challenges, with revenue falling 18.5% in 2023 and a net loss of $103.49 million. This led to the bankruptcy filing and subsequent restructuring.

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