In the past (and perhaps the present) some shady furniture retailers have used endless going-out-of-business sales as a tactic to create urgency. Customers see that the store is closing and assume they’re going to get great deals, but only if they act fast.
In reality, the store might be closing or maybe it’s not. Sometimes the doors will close, but a suspiciously similar store will open under the same name right after.
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It’s a shady practice that was once fairly common.
One major American furniture retailer filed for Chapter 11 bankruptcy in November, 2024, and made it clear that it planned to close all stores. Those locations started having closeout sales that were quick in some cases, and protracted in others.
Furniture chains going out of business have a harder time than many other retailers. Consumers, for example, might buy an extra sweater or some dishes they don’t truly need because the price is right.
People don’t purchase an extra couch or stash away a spare kitchen set, just because they get a good deal.
That’s why some American Freight locations took longer than others to close. And, to further complicate matters, some of the locations that were shut down, will quickly open back up.
All American Freight locations closed, but some will reopen.
Image source: Benedikt Geyer from Pixabay
American Freight’s complicated Chapter 11 bankruptcy
The owner of American Freight, Franchise Group, filed for Chapter 11 bankruptcy protection for American Freight on Nov. 3, 2024. The parent company made it clear at the time that the filing did not impact any of the other brands it owns, which includes The Vitamin Shoppe, Pets Supplies Plus, and Buddy’s Home Furnishings.
Franchise Group shares a noble mission on its website.
“To provide a first-class environment for our operating companies and their associates to thrive by partnering with strong management teams who are committed to growth through franchising,” it posted.
The website no longer mentions American Freight. At the time of its Chapter 11 filing, the company issued a WARN notice for the furniture company’s corporate workers, saying it planned to wind the brand down.
I am writing on behalf of American Freight Group, LLC and its subsidiaries (collectively,“American Freight”) (FEIN: 38-3942066) to provide notice that there will be a mass layoff at American Freight’s Delaware, Ohio headquarters facility, located at 109 Innovation Court, Delaware, OH 43015, as of February 3, 2025, due to poor financial performance.
This mass layoff is expected to be permanent. There will not be any bumping rights for the affected employees. The date of the first separation will be February 3, 2025, and all affected employees are expected to be separated no later than February 3, 2025.
Franchise Group blamed American Freight’s struggles on “sustained inflation and macroeconomic challenges facing the large durable goods sector.”
American Freight rises from the dead
After it became public that American Freight was winding down its operations, Franchise Group got an offer to sell 28 of its locations. The bankruptcy court approved that sale, allowing those stores to reopen.
“The Delaware, Ohio-based group, which also owns Buddy’s Home Furnishings and other holdings, had filed an asset purchase agreement on Dec. 13, 2024, in which AF Newco I LLC would acquire the intellectual property and 31 leases (30 store leases and one distribution center) in a private sale for $1.12 million plus payment of cure costs in respect of the acquired leases,” Furniture Today reported.
The bankruptcy court has not ruled on the sale of two of the locations because the judge is waiting on more information.
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The back-from-the-dead furniture chain’s website is still operational. It appears to be updated to only reflect the stores that have reopened.
It does share the company’s purpose and history on its “About Us” page.
“American Freight offers affordable, high-quality furniture, mattresses and appliances through its direct-to-consumer, warehouse-style stores. With more than 5 million satisfied customers, American Freight has a strong legacy of helping customers save money since 1994. American Freight offers exceptional customer service and a one-stop-shop for quality furniture, mattresses and appliances at everyday low prices.”
