American Freight will shutter more than 300 home goods stores across the U.S., including 15 in California hurt by high mortgage rates and a drop in home buying and remodeling.
The Ohio-based discount retailer is closing 328 furniture, appliance and mattress stores, including 10 in Southern California, the Orange County Register reported, citing an announcement by liquidator Hilco Consumer-Retail.
The stores are expected to close by year’s end, following the likes of Big Lots and 99 Cents Only discount stores.
American Freight, founded in 1994, was purchased in 2020 by Los Angeles-based Franchise Group, owner of Vitamin Shoppe and Pet Supplies Plus.
The company bought the Sears Outlets and its sister company, Buddy’s Home Furnishings, a year earlier and then merged the American Freight and Sears Outlets chains.
After defaulting on $2 billion in loans used to buy its collection of retail chains, Franchise filed for bankruptcy protection this month after huge losses and managerial turmoil surrounding its financial backer, Los Angeles-based B. Riley Financial.
American Freight also suffered from a weak housing market, financial stress for lower-paid households and debt.
The home goods industry has been hurt in recent years by high mortgage rates, according to the Register.
Costly financing cut house-related shopping because of steep drops in home buying and remodeling.
In addition, many merchants targeting bargain shoppers ran into trouble because of economic challenges faced by lower-income households.
In Northern California and the Central Valley, American Freight will permanently lock the doors at stores in Fresno, Modesto, Rancho Cordova, Sacramento and San Leandro.
In Southern California, the company will close stores in Cerritos, Corona, La Mesa, Oceanside, Ontario, Palmdale, San Diego, Santa Ana, Torrance and West Covina.
This summer, another Ohio-based firm, Big Lots, announced it would close 315 discount stores across the U.S., 40 percent of them in California. This spring, all 99 Cents Only stores closed.
— Dana Bartholomew
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