Home improvement and hardware store chains have battled lower sales in the last year as a sluggish housing market and consumers’ reluctance to spend on renovation projects in uncertain times affects their business.
Smaller hardware chains also face fierce competition from big-box stores, like Home Depot and Lowe’s. Other challenges, such as litigation, can affect a retailer’s business as well.
Woodcrest Ace Hardware, which operates two Southern California Ace Hardware stores, filed for Chapter 11 bankruptcy protection after facing an alleged and disputed product liability and negligence lawsuit regarding Roundup herbicide, according to the debtor’s petition.
The petition did not list any other details regarding the product liability and negligence lawsuit.
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Hardware store operator files bankruptcy
The debtor, which a part of Ace Hardware’s retailer-owned hardware cooperative, did not cite increased competition, financial distress or any other specific reason for filing for Chapter 11 bankruptcy in its petition.
The Riverside, Calif.-based debtor filed its petition in the U.S. Bankruptcy Court for the Central District of California on Aug. 11, listing $1 million to $10 million in assets and debts.
Woodcrest Ace Hardware operates a store at 18845 Van Buren Blvd., Suite B5, in Riverside, Calif., and Wildomar Ace Hardware at 23881 Clinton Keith Road, in Wildomar, Calif., according to its petition. The debtor also owns a uniform retailer P&P Uniforms in Riverside.
Debtor will assume its leases
Leases for all three businesses were listed on the debtor’s petition, with Woodcrest Ace Hardware planning to assume the lease contracts. The stores continue to operate as normal.
Woodcrest Ace Hardware’s largest unsecured creditors include the Ace Hardware Corporation, owed over $620,000; CFT NV Developments, owed over $176,000; CVS Longs Drugs, owed over $121,000; 5.11, owed over $36,000; and American Express, owed over $20,000.
The debtor’s Woodcrest Ace Hardware location faces competition from a nearby Home Depot store, located about 5 miles away at 3323 Madison in Riverside. The closest Home Depot to the Wildomar Ace Hardware is about 3.8 miles away at 27738 Clinton Keith Road in Murrieta, Calif.
The company’s CEO Paul D. Shanabarger was not immediately available for comment.
Woodcrest’s second bankruptcy filing
This is Woodcrest Ace Hardware’s second trip to bankruptcy court, as it previously filed for Chapter 11 protection on April 12, 2019. The first case was closed with the approval of a final decree on Sept. 14, 2020, according to Inforuptcy.
Home Depot dominates the home improvement sector, capturing 28% of the market share in 2025, with Lowe’s owning 17% of the market and Amazon generating 11% of the sector’s sales, according to the Numerator Home Improvement Tracker.
Ace Hardware holds 2% of market share
Ace Hardware captured about 2% of the market share in 2025, according to the tracker.
Home Depot’s Chief Financial Officer Richard McPhail discussed problems with the housing market, which have led to home improvement store economic issues, during a February 2026 earnings call.
“The housing turnover has remained at historic lows since 2023, which has significantly reduced demand for projects and other purchases associated with buying and selling a home,” McPhail said in the company’s quarterly earnings call, according to MarketBeat.
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