VIRGINIA BEACH, Va.— Franchise Group, Inc., which had once owned former Top 100 furniture retail brands American Freight and Badcock Home Furniture &more, announced that it completed its Chapter 11 bankruptcy process on June 6.
As a result, two of its brands, Buddy’s Home Furnishings and Pet Supplies Plus, are now owned by newly created Fusion Parent LLC.
The company’s plan of reorganization was confirmed by the U.S. Bankruptcy Court for the District of Delaware on June 2 with the support of its key stakeholders, including secured and unsecured creditors and key business partners.
Over the past seven months, FRG said the restructuring process has enabled the company to take significant steps to strengthen its core franchise-based businesses and position them for incremental investment, growth and, ultimately, long-term success. As an important step in this strategic transformation, the company has simplified its portfolio of brands, including winding down American Freight and selling The Vitamin Shoppe.
During the process, American Freight stores were acquired by AF Newco, which picked up some 30 stores and one distribution center for around $1.12 million. According to American Freight’s website, its store count has grown to 48 stores in 22 states.
Franchise Group acquired American Freight in 2019 and combined the stores included in that deal with rebranded Sears Outlet stores it acquired earlier. In 2021, it bought Top 100 retailer Badcock Home Furniture &more before it sold the brand to former Top 100 retailer Conn’s HomePlus in late 2023.
Conn’s and Badcock filed for Chapter 11 protection in July 2024 and subsequently went out of business.
Fusion Parent will be focused on growing and supporting Buddy’s and PSP, which continue to deliver strong results and benefit from more than 200 new stores of aggregate actionable backlog. PSP, Buddy’s, and their respective management teams will be able to fully dedicate their efforts to supporting their franchisees, vendors, and customers.
With its emergence, PSP and Buddy’s will be led by a reconstituted board currently comprised of five directors with significant consumer, retail, franchising and financial leadership experience, including: Chris Rowland, CEO of Pet Supplies Plus; Chuck Rubin, CEO of West Marine and former CEO of Ulta Beauty; David Barr, board member for a number of consumer companies, including Dogtopia and Domino’s Pizza China; Susan Lintonsmith, COO of European Wax Center; and Tim Johnson, former CFO and CAO for Victoria’s Secret & Co.
Franchise Group was advised by Kirkland & Ellis LLP and Young Conaway Stargatt & Taylor, LLP as legal counsel; AlixPartners as financial advisor; and Ducera Partners as investment banker. The ad hoc group of debtor-in-possession and first lien term lenders was advised by Paul Hastings LLP as legal counsel and Lazard as investment banker.