American closing, nearly 1,000 employees affected
Updated On: Feb 17 2014 07:44:42 PM CST
Madison-based appliance and furniture retailer American is announcing plans to close its doors.
In a release sent Monday, the company said the business will start a going-out-of-business sale on Thursday.
The release said the 60-year-old company struggled over the last five years and described the economy as "unforgiving."
“While this is a sad moment it is also a proud moment. It’s a moment to be proud of our efforts and to be proud of what we have delivered to the community,” said Doug Reuhl, president and CEO of American.
About 990 employees at 11 locations will be affected. The locations include two stores each in Illinois and Iowa and five stores, corporate offices and a distribution center in Wisconsin.
"Honestly I wanted to cry. I mean everyone kind of thought it was coming but we all hoped it wouldn't. I have a lot of friends who still work there, and I feel really bad for them and their families," former American employee Wendy Franczak said.
Employees will be compensated, with benefits, through the notification period. The majority will continue employment through the closing process, according to the release.
"There are a lot of people who are going to lose their jobs because obviously they are going out of business. For a lot of people this is all they really know. This is what they've been doing for 20, 30, 40 plus years," current American employee Nathan Lange said.
Betty Hurd, a retail expert from Madison College said the Internet has changed the retail landscape and is making it difficult for big-box stores to survive. She said other retailers will eventually suffer the same fate as American.
"They were kind of a big box, so they were able to really capitalize on the era of the big box," Hurd said. "It is definitely going to be about reducing the number of stores. I mean statistically anywhere from five percent to at least 50 percent of the store real estate will probably go away over the next decade."
During the going-out-of-business sale, American said it will honor gift cards and provide refunds to customers who do not wish to redeem them. All extended warranty policies that customers purchased are valid and insured through a third-party insurance company.
Customers who have open orders waiting for delivery will either receive delivery of their goods or a refund of their deposit. All products in the service center will be repaired or returned to the customer prior to our closing.
American is filing Chapter 128 receivership to protect its creditors.
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