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American Freight

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American Freight
American Freight Appliances & Furniture
Company typeSubsidiary
IndustryRetail
Predecessor
  • Sears Surplus
  • (1968–1994)
  • Sears Outlet
  • (1987–2020)
Founded1968; 56 years ago (1968) in Kansas City, Missouri (Sears Surplus)
1994; 30 years ago (1994) in Lima, Ohio (American Freight)
FounderSteve Belford (American Freight)[1]
Defunct2020; 4 years ago (2020) (Sears Outlet)
2024; 0 years ago (2024) (American Freight)
FateFolded into American Freight (Sears Outlet)
Bankruptcy and liquidation (American Freight)
Headquarters
Delaware, Ohio[2]
,
U.S.
Number of locations
370 [1] (March 2023)
Key people
Peter Corsa (CEO)
Jeffrey Seghi (CFO)[1]
ProductsFurniture, mattresses and home appliances
Number of employees
2,000 (2022)
ParentFranchise Group[3]
Websiteamericanfreight.com

American Freight Appliances & Furniture, or American Freight, is an American retail furniture chain founded in Lima, Ohio in 1994. The company was acquired in 2020 by Franchise Group and combined with former Sears Surplus and Sears Outlet stores under the American Freight name.

History

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Sears Surplus and Sears Outlet

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In 1968, Sears opened a Sears Surplus store in Kansas City. This was the first of its kind operated by the Sears brand.

In 1987, the Surplus stores were renamed to Sears Outlet.

In 2008, Apparel was introduced to stores and served as a liquidation outlet for Lands' End.

In 2012, parent Sears Holdings spun off Sears Outlet along with Sears (Authorized) Hometown Stores, Sears Home Appliance and Showroom Stores, and Sears Appliance and Hardware Stores to form Sears Hometown and Outlet Stores, Inc (SHOS). The new company became its own independent, publicly traded company listed on NASDAQ.[4][5] At the time of the separation, there were 122 Sears Outlet Stores in operation.[6][7]

Sears Outlet logo

The company partnered with the National Volunteer Fire Council in November 2013 to raise money for local fire departments.[8] The objective of the campaign was to provide firehouses with funds to improve resources for training, equipment, and financial support.[8]

When former parent Sears Holdings filed for Chapter 11 bankruptcy protection on October 15, 2018, Sears Hometown and Outlet Stores was not affected due to having been spun off from Sears since 2012.[9]

In April 2019, it was announced that TransformCo would acquire the company.[10][11] However it was reported a few days later that Sears Hometown and Outlet Stores acquisition offer was rejected, and as a result Sears Hometown and Outlet Stores could have faced liquidation, similarly to Sears Holdings but which was acquired by ESL Investments a few months earlier.[12][13][14]

In June 2019, it was announced that TransformCo would acquire the remaining shares in the company.[15] Under the terms of the new merger agreement, Sears Hometown was given a specified period of time to market and sell its Sears Outlet and Buddy's Home Furnishing Stores businesses (together, the "Outlet Segment") to a third party for not less than $97.5 million. If the Outlet Segment is sold in accordance with the terms, it would not be acquired by Transform in the acquisition of Sears Hometown.[16] At the time of the announcement, Sears Hometown and Outlet Stores had 491 Hometown stores and 126 Outlet stores in 49 states, Puerto Rico and Bermuda.[17]

In August 2019, Franchise Group, Inc., the parent of Liberty Tax, announced plans to acquire the Sears Outlet division from Sears Hometown and Outlet Stores,[18] and on October 23, 2019, Sears Hometown and Outlet Stores completed its sale of Sears Outlet division to Franchise Group.[19] TransformCo completed the acquisition of the remainder of Sears Hometown at the end of the same business day.[20]

American Freight

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Original American Freight logo and tagline

The first American Freight store was founded by Steve Belford in Lima, Ohio in 1994 as American Freight Furniture & Mattress.[21]

By 2014, the company was operating 95 stores in 18 states, and October that year was acquired by an affiliate of private equity firm The Jordan Company of New York.[22]

The company was acquired by Franchise Group for US$450M[3] on February 14, 2020, and combined with the former Sears Outlets under the brand American Freight Furniture, Mattress, Appliance.[23]

On November 2, 2024, Franchise Group announced that they were preparing to file for Chapter 11 bankruptcy after months of losses and turmoil caused by its owner, B. Riley Financial. [24] On November 3, 2024, Franchise Group and all of its affiliated subsidiaries filed for Chapter 11 bankruptcy protection in Delaware. The company plans to keep all of its brands open during the procedure, omit American Freight. The company suffered major losses due to high rising costs and macroeconomic challenges. Liquidation sales are set to begin on November 5, with stores to close by the end of the year.[25]

Awards

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  • Customer Engagement award from the online publication Retail TouchPoints in 2014 for integration of in-store and online shopping experiences at Sears Outlet stores.[26]

References

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  1. ^ a b c Engel, Clint (February 25, 2020). "American Freight Furniture to gain 100+ stores in rebranding move". Furniture Today.
  2. ^ "American Freight Furniture Overview". Glassdoor. Retrieved August 24, 2020.
  3. ^ a b Schultz, Clark (December 30, 2019). "Franchise Group lands American Freight Group". Seeking Alpha. Retrieved August 24, 2020.
  4. ^ "Sears To Spin Off Hometown, Outlet Stores Into Separate Company". Huffington Post. August 14, 2012. Archived from the original on November 16, 2015. Retrieved November 19, 2014.
  5. ^ "Sears files to spin off Hometown, Outlet stores". Crain's Chicago Business. August 13, 2012. Retrieved August 17, 2014.
  6. ^ Booton, Jennifer (August 13, 2012). "Sears' Hometown Stores to File for IPO". Fox Business. Archived from the original on September 24, 2015. Retrieved November 19, 2014.
  7. ^ Shropshire, Corilyn (September 8, 2012). "Sears to spin off Hometown, Outlet stores Tuesday". Chicago Tribune. Retrieved November 19, 2014.
  8. ^ a b "Sears Hometown and Outlet Stores, Inc. Launches "Salute to Local Heroes" Charity Campaign to Support First Responders". National Volunteer Fire Council. November 22, 2013. Archived from the original on December 9, 2013. Retrieved August 17, 2014.
  9. ^ Eastman, Tom (October 23, 2018). "Bankruptcy filing won't impact Sears Hometown stores". The Conway Daily Sun. Retrieved November 18, 2018.
  10. ^ Tyko, Kelly (April 8, 2019). "Sears' Eddie Lampert looks to regain full ownership of Sears Hometown and Outlet Stores". USA Today. Retrieved April 11, 2019.
  11. ^ Zumbach, Lauren (April 8, 2019). "Sears continues its push into appliances by offering to buy full control of a chain spun off years ago". Chicago Tribune. Retrieved April 11, 2019.
  12. ^ McDonald, Samantha (April 10, 2019). "Why Sears' Hometown & Outlet Stores Rejected Ex-CEO's Offer to Buy Remaining Shares in Company". Footwear News. Retrieved April 16, 2019.
  13. ^ "Sears Hometown and Outlet Stores considering liquidating Hometown stores". USA Today. Retrieved April 16, 2019.
  14. ^ Zumbach, Lauren (April 16, 2019). "Sears seeks to reclaim Hometown brand". Lewiston Tribune. Chicago Tribune. Retrieved September 22, 2020.
  15. ^ "Sears Parent Co. Buying Sears Hometown And Outlet Stores". WBBM-TV. June 3, 2019. Retrieved June 3, 2019.
  16. ^ Prang, Allison (June 3, 2019). "Eddie Lampert's Company to Buy the Rest of Sears Hometown, Outlet Stores". The Wall Street Journal. Retrieved January 1, 2020.
  17. ^ Finaldi, Laura (July 26, 2019). "Sears is coming back to Manatee County ... kind of". Ocala Star-Banner.
  18. ^ Pierceall, Kimberly (August 27, 2019). "Liberty Tax to buy Sears Outlet stores for $132.9 million". The Virginian-Pilot. Retrieved September 21, 2019.
  19. ^ "Franchise Group, Inc. Closes on the Acquisition of the Sears Outlet Business from Sears Hometown and Outlet Stores, Inc". GlobeNewswire (Press release). October 23, 2019.
  20. ^ Aycock, Jason (October 23, 2019). "Sears Hometown and Outlet +2.7% after merger transaction". Seeking Alpha.
  21. ^ "Steve Belford American Freight". Worky. Retrieved August 24, 2020.
  22. ^ Engel, Clint (October 13, 2014). "Private equity firm acquiring American Freight". Furniture Today. Retrieved August 27, 2020.
  23. ^ Engel, Clint (February 25, 2020). "American Freight Furniture to gain 100+ stores in rebranding move". Furniture Today. Retrieved August 27, 2020.
  24. ^ "B. Riley-Backed Franchise Group Prepares to File for Bankruptcy". Bloomberg Law. November 2, 2024. Retrieved November 3, 2024.
  25. ^ "Vitamin Shoppe Owner Franchise Group Filing for Bankruptcy". PYMNTS. November 3, 2024. Retrieved November 3, 2024.
  26. ^ "Sears Hometown and Outlet Stores Receives Customer Engagement Award". Home Furnishing News. January 14, 2014. Retrieved August 17, 2014.
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