American Signature Inc., a furniture retailer operating for 77 years, filed for Chapter 11 bankruptcy protection in Delaware on November 22, 2025, marking the end of a once-dominant regional furniture business. The company, which operates Value City Furniture and American Signature Furniture across 120 stores in 17 states, cited a catastrophic combination of housing market collapse, federal tariffs, and intensifying competition from larger retailers. The filing revealed debts between $500 million and $1 billion, with 326 headquarters employees facing immediate job loss and approximately 825 to 900 store employees affected by announced closures.
Revenue Collapse in Two Years
The speed of American Signature’s decline was staggering. Revenue plummeted from $1.1 billion in 2023 to $803 million in 2025—a loss of $297 million, or 27 percent. Operating losses accelerated from approximately $18 million in 2023-2024 to nearly $70 million in fiscal 2024. By the time the bankruptcy filing occurred, the company’s cash reserves had dwindled to just $2 million. Court documents described the situation as “one of the most severe housing market declines in recent history.”
The housing market freeze proved particularly devastating to furniture retailers, which depend on home turnover to drive sales. Housing turnover hit a 30-year low this year, with only 28 homes per 1,000 changing hands. Mortgage rates averaged 6.3 percent, double the pandemic-era rates below 4 percent. Without families moving and furnishing new homes, retail locations became nearly empty destinations.
Tariffs and Inflation Squeeze Margins
In October 2025, President Trump imposed tariffs on imported furniture, setting rates at 25 percent on upholstered goods and rising to 30 percent effective January 1, 2026. American Signature sourced heavily from Vietnam, Indonesia, Mexico, and China, making the company particularly vulnerable to these duties. The tariffs directly compressed margins already razor-thin at 3 to 5 percent in furniture retail.
Simultaneously, the company faced inflation across labor, rent, utilities, and logistics costs—increases of 5 to 10 percent across its 120-store footprint. These mounting expenses could not easily be passed to consumers already reluctant to purchase due to the housing freeze. American Signature found itself trapped between rising costs and declining demand, a position that mid-sized retailers could not sustain while larger competitors absorbed the same shocks.
Industry-Wide Systemic Collapse
American Signature’s failure was not isolated. Between June and November 2025, five major furniture chains filed for Chapter 11 bankruptcy: 5th Avenue Furniture, American Mattress, Walker Edison, Landmark Furniture, and American Signature. The broader furniture industry contracted, with U.S. furniture sales falling 1.7 percent year-over-year in October 2025.
The collapse reversed gains from the pandemic boom. During 2020-2021, Americans spent lavishly on home furnishings, driving strong industry growth. American Signature rode that wave, but demand normalized sharply. The company’s cost structure, built for pandemic-era consumption levels, exceeded what normalized markets could support.
Immediate Impact: 33 Store Closures and Headquarters Shutdown
The bankruptcy plan announced 33 store closures—27.5 percent of the company’s footprint—across 14 states by January 28, 2026. Major metropolitan areas losing presence include Georgia (8 stores), Michigan (7 stores), and Tennessee (4 stores), along with closures in Charlotte, Miami, Richmond, and Cincinnati. These closures affect roughly 825 to 900 store employees.
On November 21, 2025, American Signature issued a WARN Act notice closing its Columbus, Ohio headquarters, terminating 326 employees, including 256 Ohio residents. The terminations included the president, chief customer officer, CFO, COO, seven executive vice presidents, five vice presidents, and multiple directors.
Customer Deposits and Vendor Exposure
Bankruptcy filings revealed $236 million in unsecured liabilities, including vendor payables, lease commitments, and customer deposits. Secured creditors are owed an additional $117 million. The top 30 unsecured creditors alone are owed $80.25 million, with major suppliers including Man Wah ($14.5 million), Targetcast ($12.5 million), and other furniture manufacturers.
Customers with paid deposits for custom orders face uncertain recovery prospects. Under bankruptcy law, rejected orders convert into unsecured claims against the estate, with recovery typically ranging from 0 to 30 percent. Value City Furniture alone receives over 2 million annual web visits, leaving hundreds of thousands of customers uncertain about their orders. The company stopped accepting returns on December 7, 2025, further limiting customer recourse.
Path Forward: Financing and Auction
American Signature secured $50 million in debtor-in-possession financing from Second Avenue Capital Partners to cover employee wages, inventory, and operational expenses. The remaining 87 stores continue operating under this arrangement. The company plans an asset sale with ASI Purchaser LLC, tied to the Schottenstein family, through a controlled auction process with a stalking-horse bid setting a floor price for competing offers.
Critical dates in January 2026 will determine the company’s fate: the 45-day auction window closes January 6, headquarters terminations conclude January 20, and store closures complete January 28. If no buyer emerges, additional closures could trigger a second wave of layoffs beyond those already announced.
The End of Regional Furniture Retail
American Signature’s collapse marks the end of mid-sized regional furniture retail as a viable business model. Larger competitors dominate the landscape: Ashley Furniture generates over $1 billion in revenue, La-Z-Boy operates 2,571 locations, and online platforms like Wayfair and Amazon capture growing market share. Traditional brick-and-mortar retailers cannot compete on price while absorbing tariffs and inflation pressures.
The 77-year journey of American Signature illustrates how structural shifts in housing markets, trade policy, and consumer behavior can rapidly destroy established businesses. For the employees, customers, and suppliers owed over $80 million, the consequences are devastating. The bankruptcy serves as a cautionary tale for regional retailers facing similar pressures across the economy.
Sources
Reuters, 24 November 2025 (bankruptcy details, financial condition, customer deposits, DIP financing)
Business Insider, 24 November 2025 (company statement, store closures, housing market analysis, stalking-horse bidder details)
Fortune, 31 October 2025 (housing turnover rate analysis: 28 homes per 1,000)
Deutsche Welle, 14 October 2025 (Trump tariffs: 25–30% on furniture)
The White House, 29 September 2025 (tariff proclamation details)