After three decades of helping Americans furnish their homes on a budget, American Freight is shutting down all 328 of its stores across the country.
The Ohio-born furniture and appliance retailer, known for its no-frills approach and affordable prices, has fallen victim to the harsh economic climate that’s been particularly tough on big-ticket retailers.
What started as a humble operation in Lima, Ohio, back in 1994 grew into a nationwide presence spanning 41 states. The company seemed to be on an upward trajectory, especially after its 2020 merger with Sears Outlet, which was meant to give the brand a fresh start. But sometimes even the best-laid plans go awry.
The writing was on the wall when parent company Franchise Group Inc. filed for Chapter 11 bankruptcy, citing the double whammy of persistent inflation and economic headwinds in the durable goods sector. Now, Hilco Consumer-Retail is orchestrating what they’re calling a chain-wide liquidation sale.
In an eyebrow-raising development, according to USA Today, court documents revealed that certain company insiders received a whopping $75 million in retention bonuses to stick around during the bankruptcy process. Meanwhile, some regular employees were offered more modest retention bonuses of $2.16 million combined – with the catch that they’d have to return the money if they jump ship before the proceedings wrap up.
For fans of Franchise Group’s other retail brands, there’s good news: The Vitamin Shoppe, Pet Supplies Plus, and Buddy’s Home Furnishings will keep their doors open, continuing business as usual. It seems the parent company is trimming its portfolio rather than dismantling it entirely.