Franchise Group has emerged from Chapter 11 bankruptcy as a streamlined company that has significantly shed some of its debt and improved its liquidity, according to a company press release.
The restructuring plan was supported by creditors and other business partners.
In the last seven months, the company streamlined its operations by closing down American Freight and selling off The Vitamin Shoppe.
Its new business operates as Pet Supplies Plus and Buddy’s Home Furnishings, which are owned by Fusion Parent.
Neil Saunders, GlobalData Managing Director, said in an email to Retail Dive: “While Franchise Group had some solid businesses, its main issue was that it carried too much debt. The sale of The Vitamin Shoppe and the winding down of American Freight—which had faced a massive slump in demand—helped to stabilize things.”
“The two businesses that now constitute the group, Pet Supplies Plus and Buddy’s, have better prospects. However, both face tough competition and need to do more to stand out and differentiate, especially in a tightening economy.”
Moving forward after emerging from bankruptcy, Franchise Group is set to focus on Pet Supplies Plus and Buddies, which have a signed agreement for 200 new stores.
The company is set to be led by new leadership, with a newly appointed Board of directors at the helm.
Franchise Group was formed as a merged company in 2019 for Liberty Tax and Buddy’s Home Furnishings.
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