Mold Remediation in Florence, KY

American Freight, a furniture store with locations in more than a dozen states, is closing all of its 328 stores including 11 in Kentucky.

Parent company Franchise Group, based in Delaware, Ohio, announced the closures Wednesday as a part of Chapter 11 bankruptcy proceedings.

Why are American Freight stores closing?

Franchise Group Inc., the parent company of the furniture store, 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.

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Will American Freight have a closing sale?

Yes, 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."

Are Vitamin Shoppe stores closing?

Franchise Group said that its other holdings, including The Vitamin Shoppe and Buddy's Home Furnishings, will remain in business.

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 stores closing in Kentucky

FLORENCE, Ky. — A large retail facility is closing its doors permanently in northern Kentucky, joining other facilities that have recently closed as well, resulting in hundreds of lost jobs.

What You Need To Know

Many have heard the jingle: “Wayfair, you’ve got just what I need!”

While that may be true, it won’t be for long in Florence. The company sent Spectrum News 1 the following statement:

“After careful consideration, we decided not to renew our lease at our Florence, Ky returns center and outlet store. While our Florence site will remain open until the end of 2025, we are working closely with affected employees to assist with job placement at other Wayfair locations and with local employment agencies.”

The closure, after just five years in Florence, will affect more than 200 jobs. The latest Worker Adjustment and Retraining Notification report shows similar closures in northern Kentucky, including Jabil across the street from Wayfair.

Northern Kentucky University economist Janet Harrah spoke about the WARN notice.

“Right now, we’re running about 800 job losses in northern Kentucky, which is a lot. Particularly if you’re one of the people that’s lost that job. But if you put it in the broader context of our entire labor market, which is the Cincinnati metro area, we are up 4,500 jobs so far this year,” Harrah said. “Retail trade is down if you adjust it for inflation, fairly substantially, from this time last year. Overall the economy is slowing, but retail trade in particular has been hard hit.”

Harrah said the number one reason is people have run through their household savings after the pandemic, and are slowing down their spending.

She said effects from the pandemic will last another two to three years.

“I am not surprised to see some of these companies, if not close, really shrink their footprint, to try to reduce their costs,” she said.

Joshua Hunt, Florence Director of Business and Community Development, sent the following statements about Wayfair closing:

“We’re disappointed to see Wayfair leave Florence, but we understand the economic challenges driving this decision. Our priority now is supporting impacted employees and ensuring they have new opportunities in our community… Wayfair’s departure has a short-term impact on our payroll tax revenue, but given the prime location near CVG (Cincinnati/Northern Kentucky International Airport), we’re confident in our ability to work with the owners of the building to quickly bring in a new tenant.”

Harrah said the retail industry sees a lot of turnover irrespective of the economy. But with more Americans shopping online, she said demand for warehouse space will remain high, and she doesn’t expect the Wayfair building to be empty for long.

As for the employees losing their jobs, Harrah said the good news is there are numerous jobs available in the area. She said similar fulfillment facilities in the area are always seeking talent..