Furniture chain liquidates 328 stores in Chapter 11 bankruptcy

Usually, when a big-name retail brand closes all of its locations after a bankruptcy liquidation, that's the end of the company, at least for a while. We've seen big names like Circuit City and Bed Bath & Beyond come back as brick-and-mortar chains under new owners years later.

We've also seen retail names that were once used for a fleet of standalone stores —like Sharper Image and Toys R Us — stamped on products or brought back in a limited fashion. There's value in name recognition, and it seems like very few brands go away forever.

Comebacks, however, can vary greatly. Toys R Us has stumbled with various models and now exists as a store-within-a-store concept at Macy's. That's not a real comeback for what was once a national big-box retail chain, but it shows the value in a familiar name.

“The notion that retail and consumer brands have value separate and apart from the enterprise really started to take hold in the prior economic cycle, in the run-up to the Great Recession,” David Peress, executive vice president at Hilco Streambank, which specializes in IP sales and disposition, told RetailDive. 

That's at least partly why American Freight, a furniture and mattress chain that used to operate 328 stores, has been brought back from the dead.

American Freight closed all its stores during bankruptcy

American Freight shared its mission statement on its website.

"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."

That's fairly generic, but the name had some equity at the time the chain first filed for Chapter 11 bankruptcy and ended up closing all of its doors.

"Big brands like Toys R Us and Bed, Bath and Beyond are all about the memories. Those brands have an inherent value and with the transaction nature that the economy is turned into where people just point and click and order whatever the cheapest product I think was starting to turn back towards nostalgia,” RTMNexus CEO Dominick Miserandino shared with TheStreet.

That may explain the wild saga of American Freight, which saw it go from Chapter 11 bankruptcy liquidation and a full shutdown to reopening stores in a very quick cycle,.

The company shared its journey in a press release.

"In late 2024, American Freight’s parent company, FRG, filed for bankruptcy protection and closed all locations on or before December 31, 2024. In 2025, AF Newco I, LLC purchased the American Freight intellectual property from FRG including the store name, logos, and certain leases and relaunched American Freight in 29 locations. AF Newco I also entered into a Licensing Agreement with a third party which opens an additional 31 licensed operations."

That's a very quick comeback, but it's not unprecedented, as roughly the same same thing happened with Big Lots. That chain closed all of its locations under a bankruptcy filing and then some of those reopened under a new operator. 

Also Read: Big Lots back from bankruptcy, but it's made some key changes

An American Freight timeline

• 1994: American Freight was founded in Lima, Ohio.
• 2019: Franchise Group acquired the American Freight Group.
• 2020: The Sears Outlet Group was acquired by Franchise Group, and its brands were merged under the American Freight name.
• 2020-2024: Franchise Group also acquired other companies, including FFO Home in 2020, which was combined with American Freight.
• 2024: Franchise Group filed for Chapter 11 bankruptcy, leading to the announcement that all American Freight stores would close.
• 2025: AF Newco I, LLC purchased the American Freight intellectual property from FRG including the store name, logos, and certain leases and relaunched American Freight in 29 stores. 
• AF Newco I also entered into a Licensing Agreement with a third party, which opens an additional 31 licensed operations.

Source: American Freight

American Freight makes a comeback

American Freight has come back from the dead, albeit with a much smaller footprint than it had previously.

"Between corporate owned stores and independently owned and operated stores, there are 60 American Freight locations continuing to serve customers today," the company shared. 

The chain also operates a website and ships nationally.

“There’s a different ownership structure in place, but our mission isn’t different than what it was. We aim to be the value option for furniture and mattresses,” Jonathan Waters, vice president of store operations, told Furniture Today. “We stock inventory in our stores so customers can take it home today or have quick delivery. We have financing options for every customer, and we’re also adding a 100% approved layaway program.”

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• Kohl’s takes drastic action to fix concerning customer behavior
• Costco Drops Long-Term Policy On Offering Only 1 Credit Option
• New Target CEO Making 3 Major Changes to Win Back Shoppers

Nostalgia and bringing back an old name can only go so far. Pop Creative's report, The Rise and Fall of Legacy Brands: Why Some Iconic Names Struggle While Others Thrive, shared some potential pitfalls.

• Some brands believe their name alone is enough to carry them forward. This mindset often leads to complacency, where innovation takes a backseat and competitors gain ground.

• Consumers change, and so should brands. One of the biggest pitfalls of legacy companies is clinging to past success rather than adapting to shifting demographics and expectations.

• While failing to change can be damaging, some brands go too far in the other direction, losing their core identity in an attempt to stay relevant.

Related: 50-year-old sporting goods retail chain closing 100s of stores