Why This Matters to Distributors: Essendant is no longer describing its restructuring solely in terms of individual facility closures and layoffs. In new Illinois WARN notices, the national wholesaler says it currently expects to cease operations and close its business unless efforts to sell assets or secure additional capital succeed. The filings cover 644 jobs tied to Essendant’s Lincolnshire headquarters and Carol Stream distribution center.
Essendant expects to eliminate 644 jobs tied to two Illinois operations as the national wholesaler pursues potential asset sales and additional capital to avoid liquidation.
The disclosures provide some of the clearest evidence yet of the severity of Essendant’s restructuring. In Worker Adjustment and Retraining Notification Act notices filed in Illinois, Essendant said it is exploring strategic alternatives but does not know whether those efforts will succeed.
“At this time, the Company does not know if these efforts will succeed, and the Company currently expects that it will cease its operations and close its business,” Essendant said in its Lincolnshire WARN notice.
Distribution Strategy Group continues to reach out to Essendant for comment and has yet to hear back.
The Illinois notices, dated Aug. 3, cover Essendant’s corporate operation in Lincolnshire and a distribution facility in Carol Stream. Together, they identify 644 employees expected to lose their jobs beginning Oct. 3 or within 14 days after that date.
At Essendant’s Lincolnshire location, 200 employees at the facility and 310 remote employees who report to it are affected, bringing the total to 510. Essendant said the terminations are expected to be permanent.
The company also expects to permanently close its distribution facility at 230 Lies Road East in Carol Stream, eliminating 134 jobs. Those terminations also are expected to occur on or within 14 days after Oct. 3 and are expected to be permanent.
Essendant Pursues Asset Sales, Additional Capital
The filings show Essendant is still pursuing alternatives that could change that outcome.
“The Company has been exploring various strategic alternatives, including potential sale transactions involving certain of the Company’s assets and operations, and securing additional capital to avoid liquidation of the Company,” Essendant said.
The language is significant because Essendant is not simply notifying government officials that individual warehouses will close. The company is explicitly warning that it currently expects to cease operations and close the business if its efforts to find an alternative are unsuccessful.
The notices do not say liquidation is certain. Essendant continues to pursue potential asset sales and additional capital, and the filings do not identify prospective buyers, investors or specific assets that could be sold.
The Carol Stream notice contains the same warning about the company’s broader future. Essendant said it does not know whether its efforts will succeed and that it currently expects to cease operations and close its business, including permanently closing the Carol Stream facility.
Illinois Closures Deepen Essendant Restructuring
The Illinois disclosures significantly expand the scope of Essendant’s previously reported restructuring.
The Lincolnshire notice covers Essendant Co., CPO Commerce LLC, and Essendant Management Services LLC. Essendant submitted the notice to the Illinois Department of Commerce and Economic Opportunity under the federal and Illinois WARN laws.
The Carol Stream filing covers Essendant Co. and Essendant Management Services LLC.
Both notices were signed by Marcela Sztainberg, Essendant’s senior vice president of human resources, who is listed as the company representative for questions regarding the planned job cuts.
The Illinois cuts come on top of previously disclosed Essendant layoffs and facility closures in Pennsylvania, Texas, Georgia, Arizona, and California. Those actions have shown the restructuring spreading across Essendant’s national distribution network.
The new Illinois filings add another dimension because Lincolnshire is Essendant’s corporate headquarters and the WARN notice includes 310 remote employees reporting to that location, rather than only workers attached to a distribution center.
For distributors, suppliers and customers, the central question is now whether Essendant can complete an asset sale, raise additional capital or reach another transaction before the October closures take effect.
Essendant’s own WARN filings make clear what the company currently expects if those efforts fail: It will cease operations and close the business.
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