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Gardener's Supply Company, a Vermont-based gardening retailer, has filed for Chapter 11 bankruptcy, citing financial difficulties stemming from a combination of pandemic-related sales surges and costly business missteps. The company, which saw significant growth during the COVID-19 pandemic, experienced a decline in revenue from $110.3 million in 2021 to $71.5 million in 2024.
Court filings reveal that the company's employee-ownership model and ill-timed investments contributed to its financial collapse. The employee stock ownership plan (ESOP) led to liquidity issues as retiring employees cashed out their stocks at peak values. Additionally, investments in systems like a $500,000 enterprise resource system and a new Warehouse Management System resulted in operational challenges and revenue losses.
Gardener's Supply Co. attempted to stabilize its finances by restructuring leadership and negotiating with its lender, Bank of America. However, these efforts were unsuccessful, and the company is now in the process of selling its assets to competitor Gardens Alive Inc. for $9 million. The sale does not include the ESOP, leaving the future of employee benefits uncertain.
The company owes over $4.5 million to unsecured creditors, and it remains unclear if these debts will be repaid. Gardener's Supply Co. currently has $4.2 million on hand but owes $8.2 million to banks. The bankruptcy case continues, with the potential for a higher bid from another buyer, which could increase the funds available to repay creditors.