Furniture retail chains have faced financial distress this year related to a slow residential real estate market, rising labor and product costs driven by inflation, rising tariff rates since April, and even lingering effects from the Covid pandemic.

Economic problems have led several small and mid-size furniture chains to file for bankruptcy protection this year, including Landmark Furniture parent Brenmark Inc., Walker Edison Furniture Company, American Mattress, and 5th Avenue Furniture.

American Signature filed for Chapter 11 protection

The most significant Chapter 11 filing this year was 77-year-old furniture retailer American Signature Inc., which owns the American Signature Furniture and Value City Furniture chains.

The operator of 120 stores across the U.S., with 3,200 employees, filed its petition on Nov 22, seeking to reorganize its business and sell its assets to stalking-horse bidder ASI Purchaser LLC, after closing several stores.

Furniture chain bankruptcies in 2025

• American Signature, Inc., Nov. 22
• Landmark Furniture parent Brenmark Inc., Nov. 9
• Walker Edison Furniture Company, Aug. 28
• American Mattress, July 6
• 5th Avenue Furniture, June 6, 2025

And now, the franchisee of the large furniture retail chain, Buddy’s Home Furnishings, has filed for Chapter 11 bankruptcy protection to implement an automatic stay of legal proceedings, halt foreclosure sales of its properties, and either reorganize its business or seek a going-concern sale of its assets to continue operating, rather than liquidating.

Buddy’s Home Furnishings franchisee files for bankruptcy protection.

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Buddy’s Home Furnishings franchisee files for bankruptcy

Buddy Mac Holdings LLC and 48 affiliates filed their petition in the U.S. Bankruptcy Court for the Northern District of Texas in Dallas on Dec. 4 to stop the foreclosure proceedings on three of its properties located in Texas, Missouri, and Illinois.

The DeSoto, Texas-based debtor listed $10 million to $50 million in assets and liabilities in its petition, according to RK Consultants.

Buddy Mac’s largest unsecured creditors include Buddy’s Newco LLC, owed over $1 million; O’Rourke Sales Company, owed over $1 million; C&L Supply, owed over $919,000; Leopard Mobility Inc., owed over $314,000; Progressive Furniture Inc., owed over $211,000; Noctova Solutions RTO Sleep, owed over $134,000; and Womble Bond Dickenson LLP, owed over $80,000.

Buddy Mac owed $12.6 million on a secured loan originated in 2019, with an original principal balance of $26 million with Intrust Bank NA, which matured on Aug. 31 and was sold to Phonix RBS LLC on Sept. 2, according to a declaration from the company’s managing member William Ian MacDonald.

Lender seeks to foreclose on Buddy Mac properties

Phonix filed a lawsuit in an Illinois state court in October to foreclose on a Marion, Ill., property securing the loan and subsequently scheduled foreclosure proceedings for Tyler, Texas, and Caruthersville, Mo., properties in December.

Buddy Mac was once the largest franchisee of the rent-to-own furniture and appliance retailer, Buddy’s Home Furnishings, with 84 store locations in Arkansas, Florida, Illinois, Kansas, Missouri, New Mexico, Oklahoma, and Texas.

Buddy Mac operates 47 stores in 8 states

• Arkansas, 9 stores
• Florida, 1 store
• Illinois, 1 store
• Kansas, 1 store
• Missouri, 12 stores
• New Mexico, 4 stores
• Oklahoma, 8 stores
• Texas, 11 stores

The company began its franchisee agreement in 2014 with franchisor Buddy’s Franchising and Licensing LLC, but has since downsized its locations since its peak to 47 stores in the same eight states.

The Buddy’s Home Furnishings rent-to-own chain, which was established in 1961, operates over 300 corporate and franchise locations

Buddy Mac had strong financial performance in recent years, generating revenues of over $73 million in 2022 and $74 million in 2023, but the chain’s parent company, Franchise Group Inc., and the franchisor were not doing well and filed for Chapter 11 bankruptcy on Nov. 3, 2024.

More bankruptcy:

• 34-year-old casual dining chain files for Chapter 11 bankruptcy
• Major seafood company files for Chapter 11 bankruptcy
• 55-year-old women’s fashion company files Chapter 11 bankruptcy

The debtor also had legal issues with the franchisor, which had filed a lawsuit against Buddy Mac on Nov. 6, 2025, seeking $643,000 in past due amounts on the franchise agreement, according to the declaration.

Buddy Mac disputes the claims in the lawsuit and has asserted $38 million in claims against the franchisor, including $34 million in damages for alleged breaches of its exclusive territory rights and rights of first refusal under its franchise agreements.

Buddy’s Home Furnishings’ top unsecured creditors

• Buddy’s Newco LLC, owed over $1 million.
• O’Rourke Sales Company, owed over $1 million.
• C&L Supply, owed over $919,000.
• Leopard Mobility Inc., owed over $314,000.
• Progressive Furniture Inc., owed over $211,000.
• Noctova Solutions RTO Sleep, owed over $134,000.
• Womble Bond Dickenson LLP, owed over $80,000.

Related: Restaurant chains owner says it might file Chapter 11 bankruptcy