Retail Distress: Furniture & Mattress Bankruptcies Rise

The year 2025 has presented formidable challenges for the furniture and mattress retail sector, witnessing a significant uptick in financial distress among smaller chains. These retailers, often competing directly with industry giants such as IKEA, Ashley Furniture, and Ethan Allen, have found themselves compelled to undertake drastic measures, including store closures and, in several instances, filing for Chapter 11 bankruptcy protection to facilitate business reorganization and ensure survival.

A confluence of intense market competition and a noticeable downturn in industry-wide sales has placed considerable pressure on numerous furniture retailers. This challenging environment suggests that the decline in sales observed in late 2025 may foreshadow further financial instability and a potential increase in bankruptcy filings across the sector.

Economic Headwinds Batter the Furniture Retail Market

The economic landscape has played a pivotal role in the current retail woes. Data from November 10, 2025, reported by the National Retail Federation (NRF) and highlighted by Home News Now, revealed a concerning trend: furniture store sales in October 2025 experienced a 1.7% unadjusted decline compared to October 2024. Furthermore, sales were down 0.8% on a seasonally adjusted basis from September 2025.

Furniture retailers have frequently attributed this sales slump to a protracted slowdown in the real estate market over recent years. This slowdown is largely a consequence of the increased interest rates implemented since the onset of the Covid-19 pandemic, which have collectively curtailed consumer spending on significant household purchases like new furniture. The decision to buy new furnishings is often closely linked to housing market activity, making the sector particularly sensitive to shifts in interest rates and housing affordability.

Beyond dampened consumer demand, retailers are also contending with escalating operational costs. Rising labor and product expenses, exacerbated by inflationary pressures, along with increased tariff levies and the lingering economic effects of the Covid-19 pandemic, have collectively pushed many furniture companies to the brink, ultimately leading to bankruptcy filings.

A Wave of Chapter 11 Filings in 2025

The year 2025 has seen several notable furniture retailers seek Chapter 11 bankruptcy protection, signaling a broad industry struggle. These filings underscore the severe financial pressures faced by both established and emerging players in the market.

Prominent Bankruptcy Cases:

• Worthy's Run Furniture LLC: A manufacturer and retailer specializing in furniture and custom wood cabinetry, Worthy’s Run Furniture LLC, initiated Chapter 11 bankruptcy proceedings on May 28, 2025. The filing aims to allow the company to reorganize its business operations and financial structure to emerge stronger.
• 5th Avenue Furniture: This independent furniture retailer, which had previously closed two locations in Shirley, N.Y., and Medford, N.Y., filed for Chapter 11 bankruptcy on June 6, 2025. The filing specifically pertains to its Bay Shore, N.Y., location, highlighting efforts to streamline operations amidst declining sales.
• American Mattress: The parent company of the 37-year-old American Mattress, based in Elk Grove Village, Ill., filed for Chapter 11 bankruptcy protection on July 6, 2025. The company, owned by AFM Mattress Company LLC, operates 67 locations across five states. Its filing indicated both assets and liabilities falling within the $1 million to $10 million range, reflecting a need for significant financial restructuring.
• Walker Edison Furniture Company: Walker Edison Furniture Company, along with three affiliated entities, filed for Chapter 11 bankruptcy protection on August 28, 2025. Their strategic objective was a swift sale of assets, with Twin-Star International Inc., a leading furniture manufacturer, positioned as the stalking-horse bidder with an offer of $20 million. This move suggests a rapid attempt to liquidate assets and mitigate further losses.

Landmark Furniture Owner Files for Bankruptcy Amidst Legal Battles

Adding to the list of distressed retailers, Brenmark Inc., the parent company operating as Landmark Furniture and Mattresses for Less, a Texas-based furniture and mattress chain, filed for Chapter 11 bankruptcy protection. This filing, submitted in the U.S. Bankruptcy Court for the Southern District of Texas in Houston on November 9, 2025, according to Inforuptcy, seeks to reorganize its business operations.

Court documents reported by BankruptcyObserver revealed that the Houston-based debtor listed assets and liabilities each ranging from $1 million to $10 million. While Brenmark Inc. did not explicitly state the reasons for its bankruptcy filing in its initial court submissions, an ongoing legal battle appears to be a significant contributing factor.

Brenmark Inc. has been embroiled in a lawsuit since June 2021, initiated by an employee who sustained an injury at work. An April 2024 Texas state court trial resulted in a jury award of over $342,000 to the plaintiff. Brenmark subsequently appealed this judgment to the Fourteenth Court of Appeals in Texas. However, as reported by Justia U.S. Law, the appellate court upheld the trial court's judgment, overruling Brenmark’s appeal on August 21, 2025.

The Chapter 11 filing, in this context, provides an automatic stay on all litigation and court actions, effectively pausing the legal proceedings while the bankruptcy case progresses. David L. Curry Jr. of Okin Adams LLP, Brenmark’s bankruptcy counsel, was not immediately available for comment on the situation.

Landmark Furniture, which a social media post indicates was established in 1997, maintains five active locations. These include stores at 5900 North Freeway, No. 115, Houston; 5770 Farm to Market 1960 Road West, Houston; 4200 Pasadena Blvd., No. 120, Pasadena, Texas; 19060 Gulf Freeway, Suite A, Friendswood, Texas; and 20465 US-59, Humble, Texas. The family-operated retailer offers a comprehensive range of home furnishings, encompassing products for living rooms, dining rooms, bedrooms, mattresses, specialty seating, home office setups, game and theater rooms, décor, and complete home packages, as detailed on the Landmark Furniture website.

Landmark Furniture Locations:

• 5900 North Freeway, No. 115, Houston
• 5770 Farm to Market 1960 Road West, Houston
• 4200 Pasadena Blvd., No. 120, Pasadena, Texas
• 19060 Gulf Freeway, Suite A, Friendswood, Texas
• 20465 US-59, Humble, Texas

The current wave of bankruptcies in the furniture and mattress retail sector highlights the vulnerability of businesses to shifting economic conditions, intense competition, and unforeseen legal challenges. While larger players might weather these storms more effectively, smaller and regional chains often bear the brunt, necessitating strategic reorganizations or asset sales to adapt to a rapidly evolving market landscape.