When At Home filed for bankruptcy earlier this week, no one was shocked. The brand’s struggles were one of the worst-kept secrets in the business, as endless speculation—no doubt driven by Bloomberg and Wall Street Journal reports of the looming filing—rapidly moved the bankruptcy from possibility to probability.
Nor were many people surprised by the company’s explanation about why this happened: It came down to the economy, tariffs and the overall challenging state of the home furnishings sector. While all of those factors absolutely played a role in At Home’s bankruptcy, the problems at the big-box chain run much, much deeper and have been building for years—arguably since its start in 2014.
At Home was built on the bones of the former Garden Ridge chain, which launched in 1979 in Texas with a merchandising positioning based on core categories like rugs, outdoor, seasonal, soft home and home decor, as well as smaller mixes of furniture, housewares and food. Garden Ridge filed for bankruptcy in 2004; it came out of the proceedings and rebranded in 2014 as At Home. The revived brand prospered for years, IPOing in 2016 and building its store count up to more than 250 locations, radiating out from its Texas base throughout the southern tier of the country and inching northward, eventually operating in 40 states.
At Home features gargantuan stores—some as large as 175,000 square feet—often located in subpar real estate near but not in prime shopping areas. Merchandise is heavily geared toward private label products, and it’s not unusual to see hundreds of SKUs of rugs or decorative pillows in assortments that dwarf just about anybody else in the business.
It’s this combination that contributed to At Home’s current situation. Ever since the company went private in 2021 after its purchase by San Francisco–based private equity firm Hellman & Friedman, At Home’s finances have been a black hole, with neither vendors nor anyone else able to track its performance. Store traffic always seemed to be light in person, and the amount of inventory on the selling floor had to require a very high level of cash to finance. Merchandise turns, though never disclosed, looked to be among the lowest in all of retailing.
Simply put, At Home has a bad business model, and the home business’s struggles have exposed those weaknesses. There has been rampant talk that At Home would file for bankruptcy for years—but the company was temporarily saved by the pandemic-driven surge in consumer furnishings sales in 2020 before its sale in 2021. Now it’s clear that the brief rush of success amid the pandemic only postponed the inevitable.
At Home says it will close about 10 percent of its stores as it winds its way through bankruptcy court and will eventually be handed over to its creditors, private equity investors or some combination therein. It may not be that simple. When Big Lots filed for Chapter 11 last yearit told a similar tale but eventually ended up liquidating the entire company. (Variety Wholesalers ultimately swooped in and has reopened about 220 of the chain’s 1,200 former store locations.)
Don’t be surprised if At Home’s scenario plays out similarly. Closing more than 20 stores is nothing these days, especially when there must be so many more unprofitable locations. And even though the new owners can keep some percentage of stores open for business, they haven’t addressed the fundamental problem of a bad business model. Those store sizes are not going to shrink in bankruptcy court.
So who stands to gain At Home’s market share? This is an inexact science, because you would have thought At Home itself would have picked up share the past few years with the closings of big competitors like Bed Bath & BeyondTuesday Morning and Big Lots. It didn’t happen—or if it did, it wasn’t enough to ultimately make a difference.
Now you have to point at the best usual suspect for market share gain: HomeGoods and the rest of the TJX stable of brands. Categories like decorative pillows, accent furniture and home decor are core competencies at HomeGoods and its rapidly growing little sister HomeSense. Look for other off-pricer retailers like Ross, Burlington and Ollie’s to benefit as well.
Maybe big discounters such as Walmart and Target will see a few more clicks, but they don’t have the assortments that seem to have attracted the At Home customer. And let’s not forget Wayfair and Amazon—although At Home was not a player in e-commerce.
Whatever ultimately happens with At Home, it will be part of the significant hollowing out of the mainstream home furnishings retail sector we’ve seen over the past five years. It’s not like apparel fashion when a few majors go out because there are plenty more out there to pick up the slack.
That’s not the case with home furnishings. Billions of dollars of consumer spending have disappeared from the marketplace, yet to be replaced. And maybe that’s the biggest takeaway from this latest bankruptcy: There’s an enormous void out there, and that’s an amazing opportunity for the right retailer. It’s only a matter of time before someone comes along to fill it.
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Warren Shoulberg is the former editor in chief for several leading B2B publications. He has been a guest lecturer at the Columbia University Graduate School of Business; received honors from the International Furnishings and Design Association and the Fashion Institute of Technology; and been cited by The Wall Street Journal, The New York Times, The Washington Post, CNN and other media as a leading industry expert. His Retail Watch columns offer deep industry insights on major markets and product categories.
