A major American furniture retailer, one that has been part of the country’s home-goods landscape for 75 years, has officially become the latest victim of the nation’s unstable housing market and increasingly cautious consumer spending. The company disclosed in court documents earlier this week that it had entered bankruptcy protection, marking yet another blow to a retail sector still struggling to recover from post-pandemic economic turbulence.
For decades, the chain carved out a solid presence in the mid-priced furniture market, drawing steady foot traffic from families furnishing new homes, renters upgrading their spaces, and customers seeking accessible price points. But the retailer’s recent filing highlights a grim reality: the home-goods boom that once defined the pandemic era has fully reversed, leaving behind weakened balance sheets and shrinking demand.
Executives outlined the severity of the situation bluntly, citing what they described as “one of the most severe housing market declines in recent history.” That downturn has sharply reduced big-ticket purchases—especially the bedroom sets, sofas, and dining room packages that once kept this retailer thriving. As mortgage rates climbed and home sales fell, the furniture sector slid into a slump from which several companies have already failed to recover.
The chain, which operates more than 120 stores across the United States and employs roughly 3,000 workers, now faces an uphill battle to survive. According to restructuring plans filed in court, more than a quarter of its locations—33 stores in total—will shutter in the coming months. The closures are part of a sweeping blueprint meant to stabilize operations, cut losses, and attract new investment.
Only in the middle of the bankruptcy declaration was the retailer formally identified: American Signature, the parent company of Value City Furniture and American Signature Furniture.
Its co–chief restructuring officer, Rudolph Morando, spelled out the company’s strategy in stark terms. The plan includes aggressive inventory reductions, store-wide liquidation sales, and a race to raise enough operating cash to keep remaining locations afloat. Clearance events have already launched nationwide, with shoppers reporting discounts of 20 to 40 percent as the company scrambles to convert furniture stock into liquidity.
Liquidation Begins as the Company Fights to Stay Operational
Despite the financial chaos, the retailer insists it will still participate in Black Friday promotions—both online and in stores—to capture desperately needed holiday revenue. Remaining locations will continue operating through the bankruptcy process, although analysts warn that inventory shortages are inevitable as closing stores purge stock and distribution channels strain under restructuring pressure.
The deeper financial picture is bleak. Between 2024 and 2025, net sales plunged by nearly $150 million, while losses deepened by another $52 million. Executives acknowledged in filings that emergency debt financing is required simply to keep basic operations running. Current liabilities fall between $500 million and $1 billion, and the company’s largest unsecured creditors include major manufacturers such as Tempur-Pedic, Sealy Mattress Manufacturing, and Ashley Furniture—an indication of how widely the collapse may ripple across the supply chain.
From Pandemic Boom to Post-Pandemic Bust
The downfall of this longtime retailer mirrors the arc of the broader home-goods industry. In 2020 and 2021, as millions of Americans stayed home, demand for furniture skyrocketed. Families used stimulus payments to upgrade living rooms. Remote workers purchased home office equipment. Homeowners renovated and redecorated at unprecedented rates. That surge led to blockbuster revenue jumps—American Signature enjoyed a staggering 37 percent sales increase in 2021 alone.
But the boom was short-lived. As travel returned, inflation rose, and housing activity cooled, demand for home goods collapsed. Consumers shifted spending away from domestic upgrades and became far more reluctant to make large discretionary purchases. Rising costs of borrowing pushed many potential homebuyers out of the market altogether.
Morando summarized the shift bluntly in his declaration: “Although the company experienced a period of opportunistic growth during COVID, like many peers in the industry, it has since faced significantly decreased sales volume over the past year.”
The Housing Market Squeeze Tightens
The company attributes much of its crisis to the deteriorating housing market—a vital engine for the furniture sector. When home prices fall or when mortgage rates soar to levels that freeze buyer activity, furniture sales inevitably plunge. Without waves of new homeowners needing to furnish bedrooms, dens, and living spaces, home-goods retailers lose their most dependable stream of revenue.
Across many metro areas, declining home prices, increased inventory, and high borrowing costs have combined to stall the housing market. Consumers are increasingly hesitant to commit to major financial obligations, especially amid concerns about job stability and rising debt levels.
Analysts warn that unless the housing market improves meaningfully, the furniture industry will remain under pressure for years to come.
A Retail Sector in Freefall
This bankruptcy represents just one more chapter in an accelerating wave of retail failures. The home-goods and furnishings sector has been contracting steadily since the pandemic-era spike. Several household-name chains—including Bed Bath & Beyond, Conn’s HomePlus, Christmas Tree Shops, Big Lots, The Container Store, and At Home—have either filed for bankruptcy, closed stores, or drastically downsized due to falling foot traffic, high operating costs, and shifting spending habits.
Even industry giants are feeling the strain. Home Depot reported fewer customers than expected in its most recent quarterly update, citing widespread consumer reluctance to take on costly home projects. CFO Richard McPhail noted that many households simply do not want to make “larger financial commitments amid an uncertain economic environment.”
Lowe’s echoed similar warnings, missing Wall Street expectations and signaling that the slowdown is not isolated to any single retailer. These patterns suggest that the sector may be entering a prolonged slump rather than a temporary downturn.
Searching for a Buyer—and a Lifeline
American Signature’s next phase will involve simultaneous efforts to reorganize, negotiate with creditors, and explore potential buyers. Whether a sale materializes is unclear. While distressed retail firms sometimes attract private equity interest, the current market conditions—and weak consumer demand—could make a buyer hesitant.
Employees remain in a state of uncertainty. Those working inside closing stores face layoffs, while staff at remaining locations must navigate the instability that comes with bankruptcy: fluctuating inventory, unpredictable schedules, and the looming possibility of further closures if restructuring fails.
Customers, too, will feel the impact. The chain built its reputation on accessible pricing and large showrooms offering a wide range of options. With dozens of stores closing, shoppers in the Midwest and Mid-Atlantic—two of the company’s strongest regions—may find fewer convenient mid-range furniture options.
A Warning Sign for What Comes Next
The chain’s collapse raises urgent questions about how many more furniture and home-goods retailers may soon follow. Companies that expanded aggressively during the pandemic now face overextended footprints, rising costs, and a customer base that is drastically more frugal than it was just a few years ago.
Rising interest rates, shrinking savings, and climbing credit-card balances all contribute to an environment where consumers are scaling back purchases of non-essential goods. For furniture retailers, which rely heavily on big-ticket transactions, this trend is particularly dangerous.
American Signature’s bankruptcy stands as one of the clearest indicators yet that the pandemic-era boom is firmly behind us. What lies ahead may be a wave of further closures, consolidations, and restructurings across the industry.
For now, the company enters Chapter 11 fighting to survive—but its fall is undeniably part of a much larger story about the shifting realities of American retail.
Emily Johnson is a critically acclaimed essayist and novelist known for her thought-provoking works centered on feminism, women’s rights, and modern relationships. Born and raised in Portland, Oregon, Emily grew up with a deep love of books, often spending her afternoons at her local library. She went on to study literature and gender studies at UCLA, where she became deeply involved in activism and began publishing essays in campus journals. Her debut essay collection, Voices Unbound, struck a chord with readers nationwide for its fearless exploration of gender dynamics, identity, and the challenges faced by women in contemporary society. Emily later transitioned into fiction, writing novels that balance compelling storytelling with social commentary. Her protagonists are often strong, multidimensional women navigating love, ambition, and the struggles of everyday life, making her a favorite among readers who crave authentic, relatable narratives. Critics praise her ability to merge personal intimacy with universal themes. Off the page, Emily is an advocate for women in publishing, leading workshops that encourage young female writers to embrace their voices. She lives in Seattle with her partner and two rescue cats, where she continues to write, teach, and inspire a new generation of storytellers.
