by Signs deal to be acquired by American Freight parent Franchise Group
ORLANDO, Fla . — Franchise Group, the publicly held parent of American Freight Furniture, has signed a deal to acquire FFO Home, which has filed for Chapter 11 bankruptcy protection in the process.
The transaction is expected to close by year end, pending court approval. After that, Franchise Groups plans to rebrand the FFO business and roll it into its American Freight business, according to a release. Owned by private equity firm Sun Capital Partners, the Top 100 company FFO operates 31 stores in Arkansas, Indiana, Kentucky, Missouri and Oklahoma, a number that was more than cut in half this year on top of consolidation the year before.
Terms of the deal were not disclosed. However, a report by Law360 said Franchise Group agreed to provide up to $6.5 million in debtor-in-possession financing and could pay up to $13.5 million, which includes its $7 million stalking horse bid and the DIP facility draw. FFO is asking for bid deadlines and a sales hearing by mid-December, the report said.
The Fort Smith, Ark.-based FFO Home filed for protection in U.S. Bankruptcy Court in Delaware Thursday as Furniture Factory Outlet.
var gi_protocol = document.location.protocol;
var gi_redir = “”;
var gi_dasrc = gi_protocol + “//display.hcgmedia.com/?dsid=548202072085523523&pid=329&skid=76&if=0&at=0&alid=728_90&adtype=0&exty=1&special=0&redir=” + gi_redir + “&r=” + Math.random();
document.write(“”);
var gi_protocol = document.location.protocol;
var gi_redir = “”;
var gi_dasrc = gi_protocol + “//display.hcgmedia.com/?dsid=57420208119551504&pid=329&skid=76&if=0&at=0&alid=728_90&adtype=3&exty=1&special=0&redir=” + gi_redir + “&r=” + Math.random();
document.write(“”);
In a release, Franchise Group CEO Brian Kahn said, “FFO provides us a great opportunity to expand our store footprint and growth at American Freight.
“We look forward to welcoming FFO employees to our team and believe there will be a seamless transition since FFO has a comparable operating philosophy, customer base and culture as American Freight.”
In the release, FFO CEO Hank Mullany said, “The planned transaction places FFO with a partner that has strong financial resources, that is dedicated to growth and support of our people.”
According to court records noted in the Law360 report, Donald Roach, (identified as FFO’s CEO) said the company was working on revitalizing its brand when the pandemic shutdowns hit. FFO doesn’t sell online, so revenue dropped to zero. It ended up permanently closing 37 stores and laying off 395 employees, according to the report.
Roach said, while the remaining stores re-opened, “‘cash pressures’ from the shutdown remain and the pandemic is still impacting transportation, the availability of raw materials and the production of the company’s furniture suppliers,” the report said.
“As a result, the debtors’ revenue continues to be choked by the lessened inventory supply chain,” Roach said, according to Law360.
Early this year, Franchise Group completed the purchase of the 176-store Top 100 company American Freight in a cash deal valued at about $450 million. That move followed years of aggressive expansion by the Delaware, Ohio-based promotional-oriented American Freight.
Franchise Group also is the owner of Buddy’s Home Furnishings and the Sears Outlet business, the latter rebranded this year to American Freight Appliance, Furniture and Mattress. That move was expected to bring American Freight’s store count up to about 300 locations.
Franchise Group is an operator of franchised and franchise-able businesses including Liberty Tax Service and The Vitamin Shoppe. It operates more than 4,000 locations combined, primarily in the United States and Canada — a mix of company-owned and franchised stores.
var gi_protocol = document.location.protocol;
var gi_redir = “”;
var gi_dasrc = gi_protocol + “//display.hcgmedia.com/?dsid=578202081881555635&pid=329&skid=76&if=0&at=0&alid=728_90&adtype=3&exty=1&special=0&redir=” + gi_redir + “&r=” + Math.random();
document.write(“”);
var gi_protocol = document.location.protocol;
var gi_redir = “”;
var gi_dasrc = gi_protocol + “//display.hcgmedia.com/?dsid=582202091474319419&pid=329&skid=76&if=0&at=0&alid=728_90&adtype=3&exty=0&special=0&redir=” + gi_redir + “&r=” + Math.random();
document.write(“”);
var gi_protocol = document.location.protocol;
var gi_redir = “”;
var gi_dasrc = gi_protocol + “//display.hcgmedia.com/?dsid=5892020108184154614&pid=329&skid=76&if=0&at=0&alid=728_90&adtype=3&exty=1&special=0&redir=” + gi_redir + “&r=” + Math.random();
document.write(“”);
var gi_protocol = document.location.protocol;
var gi_redir = “”;
var gi_dasrc = gi_protocol + “//display.hcgmedia.com/?dsid=566202081191214486&pid=329&skid=76&if=0&at=0&alid=728_90&adtype=3&exty=1&special=0&redir=” + gi_redir + “&r=” + Math.random();
document.write(“”);
