Furniture Factory Outlet files for bankruptcy; on selling block
Furniture Factory Outlet is hoping for a sale.
The Midwest retailer filed for bankruptcy protection, citing tight cash and supply chain disruption related to the COVID-19 pandemic. Furniture Factory Outlet, which is owned by private equity company Sun Capital Partners, has received a “stalking horse” bid of $7 million from Ohio-based furniture retailer American Freight.
Furniture Factory Outlet operated 68 stores pre-pandemic, but it has been closing locations as a result of pandemic-related shutdowns and loss of revenue. As of its filing, the company is down to 31 locations across Arkansas, Missouri, Oklahoma, Kentucky, and Indiana, in addition to a bedding manufacturing facility and one distribution facility.
In court papers, Furniture Factory Outlet noted that it has faced ongoing supply chain challenges brought on by the pandemic which have put added pressure on its business.
“Raw materials have been harder to acquire, which has impacted manufacturers’ ability to produce goods,” the retailer stated in its filing. “The pandemic has also impacted manufacturing safety which has lessened the amount of finished goods available. Furthermore, transportation of raw materials and finished goods has been additionally pressured as a result of restrictions on the labor force. As a result, the debtors’ revenue continues to be choked by the lessened inventory supply chain.”