'Everything on sale': American Freight closing all stores amid parent company's bankruptcy
- The closures are part of Chapter 11 bankruptcy proceedings by parent company Franchise Group Inc.
- Franchise Group Inc. cited "sustained inflation and macroeconomic challenges" as reasons for the closures.
- Going-out-of-business sales will be managed by Hilco Consumer-Retail.
Furniture store American Freight is set to close all of its 328 locations in dozens of states as a part of Chapter 11 bankruptcy proceedings by its parent company, Franchise Group Inc.
Franchise Group, based in Delaware, Ohio, announced the closures Wednesday as a part of the bankruptcy filing but said that its other holdings, including The Vitamin Shoppe and Buddy's Home Furnishings, will remain in business.
Franchise Group Inc. said that they are closing American Freight due to, "sustained inflation and macroeconomic challenges facing the large durable goods sector," in a news release announcing the filing.
American Freight will hold going-out-of-business sales at its stores across 41 states, managed by Hilco Consumer-Retail − a company that conducts liquidations.
"Our goal is to deliver outstanding value to customers during this full chain closing sale," Ian Fredericks, CEO of Hilco Consumer-Retail said in a statement. "Everything is on sale and must be sold."
American Freight corporate owner paid bonuses ahead of bankruptcy
Unnamed insiders with Franchise Group got $5.75 million in retention bonuses to stay with the company through the bankruptcy process, according to court documents obtained by USA TODAY on Thursday. Some other employees not considered insiders were paid $2.16 million in bonuses that could be returned if they do not stay through the bankruptcy.
The payments were made ahead of the bankruptcy filing, according to the documents. The move made the payments unreviewable to creditors and federal financial watchdogs, according to Bloomberg.
The financial news outlet said such bonuses are common to maintain continuity through the bankruptcy process and to help creditors recover more money.
Franchise Group Inc. did not immediately respond to a request for comment Thursday.
American Freight Locations
(This story has been updated with new information)
