Furniture retailer American Freight to close its stores due to Chapter 11 bankruptcy – These are the 328 stores and locations affected by the mass closure

American Freight, a popular furniture and appliance retailer, announced it will close all of its 328 stores across 41 states. This decision stems from Chapter 11 bankruptcy proceedings filed by its parent company, Franchise Group Inc., based in Delaware, Ohio. Franchise Group cited ongoing economic challenges, including sustained inflation and issues impacting the large durable goods sector. These economic pressures have hindered consumer spending on big-ticket items like furniture, ultimately driving the company to this difficult decision.

What states will be most affected by American Freight store closures?

With stores in nearly every region of the United States, the closures will impact a broad range of communities. Major states affected include Texas, Florida, California, and Illinois, where American Freight has multiple locations. The shutdown will especially hit states where American Freight served as a primary option for affordable furniture and home appliances. Residents in these areas may now face fewer options, particularly for lower-priced furniture, often essential for individuals and families on a budget.

What’s next for Customers? Storewide sales and final purchases

In light of the shutdown, American Freight will offer going-out-of-business sales across its locations. Managed by liquidation company Hilco Consumer-Retail, these sales present an opportunity for customers to purchase furniture, appliances, and home goods at significant discounts. As Ian Fredericks, CEO of Hilco Consumer-Retail, noted, “Everything is on sale and must be sold.” Customers should anticipate sales on all items, from living room furniture to kitchen appliances, as the company looks to clear out its entire inventory. However, those interested should act fast, as sales are expected to end once stock runs out.

Are other franchise groups affected?

While American Freight is facing closure, Franchise Group Inc. clarified that some of its other brands, including The Vitamin Shoppe and Buddy’s Home Furnishings, will remain operational. The company’s focus on maintaining its more resilient brands reflects its strategy to restructure and preserve certain assets amidst financial challenges. For now, only American Freight will be impacted by these bankruptcy proceedings, though Franchise Group continues to assess its overall business portfolio.

What does this mean for franchise group employees?

Alongside the store closures, Franchise Group reportedly provided $5.75 million in retention bonuses to company insiders as part of the bankruptcy filing, according to court documents. This practice is common in bankruptcy cases to retain key employees who can assist in maximizing returns for creditors. However, it has raised questions about the fairness of compensating executives during a period of mass layoffs and store closures affecting hundreds of American Freight employees.

These are the 328 locations of the American Freight stores that are closing 

Source: Hilco Consumer – Retail