OSH, Former Suitor for Ex-DeLano's Space in Tam Valley, Files for Bankruptcy

Orchard Supply Hardware, the San Jose-based retail chain that pulled the plug on its plans to open a store at the former DeLano's space in Tam Valley in 2012, has filed Chapter 11 bankruptcy, Reuters reported Monday morning. 

The San Jose-based OSH operates 91 stores in California, including one in San Rafael on Andersen Drive. Rival retailer Lowe's may step in to buy at least 60 of those locations if no other buyers emerge, according to Reuters.

No word yet on which stores would be picked up by Lowe's, but the speculation is the neighborhood hardware and garden stores in areas where Lowe's lacks a presence would be top priority. 

Lowe's, which has 110 stores in California, doesn't have a location in Marin. The closest stores are in Rohnert Park and San Francisco.

"Orchard's neighborhood stores are a natural complement to Lowe's strengths in big-box retail, offering smaller-format hardware and garden stores catering to the needs of local customers," said Robert Niblock, president, chairman and CEO of Lowe's told Home Channel News. "Strategically, the acquisition will provide us with immediate access to Orchard's high-density, prime locations in attractive markets in California."

Orchard Supply reported $657 million in revenue last year, Home Channel News reported.

OSH, which broke off from parent company Sears Holdings Corp two years ago, filed a petition for relief under Chapter 11 in the U.S. Bankruptcy Court in the District of Delaware. Orchard Supply partly blamed "hefty dividends paid out to its former parent" for the economic failure, Reuters reported.

In early 2012, OSH inked a preliminary deal to move into the 23,000-square-foot former DeLano's space in the heart of Tam Junction. The Tam Valley DeLano's was evicted in December 2010 along with four other DeLano's in the Bay Area for falling behind on rent.

As news of OSH's interest spread in Tam Valley, local resident Mark Marinozzi created a pair of online petitions, one invoking the community’s need for a grocery store in the space at 209 Flamingo Road and the other urging one prospective grocery tenant to move into Tam Valley. Goodman Building Supply, the closest large hardware store to the former DeLano's site, also launched an aggressive petition and lobbying campaign at the time.

The former DeLano's space remains vacant. In December 2012, when the space hits two-year vacancy mark, Bob Knez, CEO of HL Commercial Real Estate in San Rafael and the agent for the building's owners, the Parrish Trust, noted that DeLano's sublease on the Tam Valley space did not run out until April 2012, so the Parrish Trust was getting revenue – approximately $46,300 per month based – from the vacant building for 16 months after DeLano's closed

"We've been talking to plenty of people since then but there's nothing to report at this time," he said at the time.