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New York
CNN
—
At Home, a popular home goods retailer with 260 stores across 40 US states, has filed for bankruptcy, citing the backdrop of tariff increases and a slowdown in consumer spending.
The Dallas-based company announced Monday that it had entered an agreement with its lenders that “will eliminate substantially all” of its roughly $2 billion in debt and provide $200 million in fresh funding to keep At Home operating while it navigates the Chapter 11 process.
Brad Weston, At Home’s CEO who joined the company last year, said in a statement that the company is “operating against the backdrop of an increasingly dynamic and rapidly evolving trade environment as we navigate the impact of tariffs” and that the changes “will improve our ability to compete in the marketplace in the face of continued volatility and increase the resilience of our business for the long term.”
Businesses across the United States are grappling with uncertainty about tariffs, including on the countries from which At Home sources its products, notably China. At one point, American tariffs on that country were as high as 145% before an agreement last month to temporarily lower that to 30%.
A pullback in discretionary spending in the US in recent years has also spelled trouble for the home goods industry, with The Container Store, Bed Bath & Beyond and Big Lots all filing for bankruptcy.
However, the main problem for At Home is its “extensive debt that the company had on its balance sheet,” according to Neil Saunders, managing director of GlobalData. “This was not sustainable and its elimination under Chapter 11 will provide a more stable basis on which the company can operate.”
He added that At Home’s proposition is “weak” and is “not sufficiently differentiated to compete against rivals like Ikea, Wayfair and others.”
“There is way too little inspiration and not nearly enough excitement to draw people in to the stores, particularly in areas where competition is high,” Saunders wrote in a note.
At Home, which sells a wide variety of items such as furniture, rugs and other home accessories, said it would continue to operate as usual, including fulfilling orders, paying vendors and maintaining its loyalty program during the Chapter 11 process.
However, the privately held company hinted that it might close some locations, saying that a “majority of our stores will remain open.” The Wall Street Journal recently reported that around 20 At Home locations were set to shutter.
Upon exiting Chapter 11, At Home “will move forward with new owners and a meaningfully strengthened balance sheet,” Weston said.
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