American Freight, the popular furniture retailer known for its budget-friendly deals, is set to close all of its 328 locations across the United States following the Chapter 11 bankruptcy proceedings of its parent company, Franchise Group Inc. This unexpected move comes as a direct response to ongoing inflation and various macroeconomic challenges that have severely impacted the durable goods sector.

Official Announcement and Ongoing Operations

In an announcement released by Franchise Group, based in Delaware, Ohio, the decision to shutter American Freight was made official on Wednesday. However, the company reassured customers that its other brands, including The Vitamin Shoppe and Buddy's Home Furnishings, will continue to operate normally during this tumultuous period.

Liquidation Sales

Starting soon, American Freight will kick off nationwide going-out-of-business sales, managed by Hilco Consumer-Retail, a leading liquidation firm. "Our goal is to deliver outstanding value to customers during this full chain closing sale," stated Ian Fredericks, CEO of Hilco Consumer-Retail. "Everything is on sale and must be sold," he emphasized, urging customers to take advantage of the significant discounts on offer.

Controversial Bonuses for Executives

In a controversial twist, insider sources revealed that Franchise Group executives were granted a total of $5.75 million in retention bonuses just before the bankruptcy filing. This bonus scheme's objective was to keep key personnel on board during the bankruptcy process, which can often be chaotic and challenging for a company. Additionally, other employees received $2.16 million in bonuses, contingent upon their retention through the bankruptcy phase. Critics have raised concerns about the ethical implications of such bonuses, especially during a time when many employees could be facing job loss.

Broader Implications and Final Thoughts

This news has sent shockwaves through the retail sector, leaving customers and employees alike grappling with the fallout. With inflation still a significant concern and economic uncertainties lingering, the closure of American Freight highlights broader issues within the retail landscape.

While Initial reports hinted at a possible turnaround strategy for the brand, this latest development indicates a definitive end for American Freight. In light of the upcoming sales, customers are encouraged to visit their local stores to explore the inventory before the final closeout.

Stay tuned for more updates as the situation develops!