The home decor retail world is feeling the heat again.
At Home, the Texas-based chain with 200 stores scattered across the U.S., is reportedly on the verge of filing for Chapter 11 bankruptcy protection.
This potential move comes after the company missed an important interest payment earlier this month, sparking concerns about its financial future.
What’s Happening with At Home’s Finances?
According to Bloomberg, At Home missed a critical interest payment due May 15 and now has until June 30 to come up with a plan to avoid bankruptcy.
The retailer operates in 40 states, offering everything from affordable $30 rugs to $450 accent chairs, targeting the low- and mid-tier home decor market.
But it hasn’t been able to keep up with consumer tastes or competition, experts say.
Neil Saunders, a retail expert and managing director at GlobalData, points out that the company is burdened with too much debt and uninspiring stores.
“They’re getting outpriced and outshined by competitors like IKEA and HomeGoods,” Saunders explained.
If bankruptcy does happen, he suggests some store closures might follow, but it’s still unclear.
Debt, Tariffs, and Supply Chain Struggles
Trouble has been brewing for a while. Rumors about At Home’s financial struggles started circling in April, with reports showing the company is drowning in over $2 billion of debt.
To make matters worse, tariffs on imports from China — where much of At Home’s inventory is sourced — are adding to their headaches.
Right now, goods from China face a steep 30% tariff.
The company has been trying to shift its supply chain away from China since late 2023, looking to build relationships with manufacturers in India.
However, this transition isn’t happening overnight.
Plus, India’s tariff situation remains uncertain, as negotiations with the U.S. continue to potentially lift a paused 26% tariff.
Broader Industry Challenges and Changing Consumer Habits
At Home isn’t alone in facing these difficulties. The home improvement and decor sector experienced a surge during the pandemic when many people redecorated their homes.
But now, inflation and tighter budgets have cooled consumer spending on non-essential items like furniture and home accessories.
Tim Hynes, global head of credit research at Debtwire, explains that although inflation is easing, prices remain significantly higher than before the pandemic.
“Shoppers are prioritizing essentials and experiences over discretionary goods,” he told DailyMail.com.
This shift has contributed to a wave of bankruptcies in the industry.
A Growing List of Struggling Retailers
Since 2022, several home-focused retailers have filed for bankruptcy, including Bed Bath and Beyond, Christmas Tree Shops, Bargain Hunt, Conn’s, LL Flooring, and The Container Store.
Some, like LL Flooring and The Container Store, have managed to emerge from bankruptcy, but others have completely shut down their physical stores.
If At Home follows the same path, consumers might initially benefit from bigger sales and discounts.
But long-term, Hynes warns that ongoing tariff policies, especially those originating from Trump-era trade decisions, could keep prices high for both retailers and shoppers.
What Lies Ahead for At Home?
With the retail giant Hellman & Friedman having acquired At Home for $2.8 billion in 2021, expectations were high.
Yet, the company’s current challenges show just how tough the home decor market has become amid rising costs and shifting consumer habits.
Neither Hellman & Friedman nor At Home responded immediately to requests for comment on the situation.
In the coming weeks, all eyes will be on how At Home navigates this crisis — whether it can restructure successfully or faces a painful bankruptcy that could reshape the home decor retail landscape once again.