Gardener’s Supply Company files for Chapter 11 bankruptcy

Gardener’s Supply Company, a Vermont-based chain of IGCs with six locations and four affiliates, has filed for Chapter 11 bankruptcy, according to court documents from the United States Bankruptcy Court for the District of Delaware. 

Founded in 1983, Gardener’s Supply Company is a 100% employee-owned company headquartered in Burlington, Vermont. The business sells environmentally friendly gardening supplies, live plants, trees, shrubs and related products at its retail facilities located across Vermont, New Hampshire and Massachusetts. 

The business is not closing, but an asset purchase agreement for $9 million with Gardens Alive Inc. was made as of June 20, court records show.

After experiencing rapid growth during and after the pandemic, Gardener’s Supply saw record sales in 2020 to 2022, in line with the explosive growth in the gardening industry overall during the COVID-19 pandemic, and a sharp increase in its employee stock ownership plan value, according to court documents. 

This, along with the retirement of several employees with significant tenure, led to large retirement-related payout obligations under the ESOP plan, stock appreciation plan and warrant plan, straining liquidity, the documents say. 

After the pandemic, sales returned to historical levels, and the company undertook several costly process improvements, including a new enterprise resource system and warehouse management system, the documents state. Implementation issues caused widespread fulfillment delays, depressed customer retention and seasonal underperformance, the documents continue.

The business, which is highly cyclical and funds itself through a line of credit loan through Bank of America during its two busy seasons, became overleveraged and out of compliance with its loan. It entered into multiple forbearance agreements with the bank beginning in 2023, according to the documents. 

Despite changes made to the company's training and leadership team in July 2024 to address the ongoing issues, the business was unable to refinance or exit the loan. This led to a third forbearance agreement, which expired June 29, the documents say. 

“Over the past two years, America’s Gardening Resource [the company's official name; it does business as Gardener's Supply Company] has been working diligently to recover from the post-COVID downturn in business,” said director of retail Ashley Mullen in a statement. “Despite cost-cutting measures, the challenges posed by increased competition, rising shipping expenses, tariffs and escalating marketing costs have proven insurmountable. 

The company decided to engage in a sale process to correct the company and ensure its creditors and stakeholders can maximize value, according to the documents. It partnered with Tower Partners, LLC, as its investment banker in December 2024 to market for sale of all the company’s assets. 

Ultimately, only one asset purchase agreement was submitted by Gardens Alive, Inc.

To obtain approval of the asset purchase agreement, Gardener’s Supply must demonstrate it has taken reasonable steps to obtain the highest and best price possible for the acquired assets, the documents state. 

Potential bidders can submit alternative offers until the deadline of 5 p.m. EST July 15. If a topping offer is received, an auction will be held beginning at 10 a.m. EST July 18. The sale hearing will take place at 10 a.m. EST. Aug. 1.

The purchased assets would include all the rights, titles and interests of Gardener’s Supply. Excluded assets include cash and cash equivalents, all bank accounts, damaged inventory, all non-assigned insurance policies, causes of action, and tax refunds and rebates, the documents say.

“Despite these changes, AGR remains steadfast in its commitment to providing the same exceptional products and service that our customers have come to rely on,” Mullen said in the statement. “Business will continue as usual, ensuring that both our online and retail shoppers enjoy the quality and selection they have always cherished. Our dedication to meeting our customers’ needs remains at the heart of everything we do.” 

Editor’s note: Read Garden Center magazine’s 2023 Top 100 Garden Centers profile on Gardener’s Supply Company here. Read Garden Center magazine’s 2018 cover story on the business’s employee stock ownership plan here. Read Garden Center magazine’s 2018 story on Gardener’s Supply’s expansion here.