Conn’s HomePlus, a prominent Texas-baser furniture and appliance retailer currently facing financial difficulties that may lead to the closure of nearly 100 stores and a potential bankruptcy filing. In recent years, Conn’s has been struggling, facing three consecutive fiscal years of losses.
Due to the rising cost of living, customers have cut back on spending including furniture purchases. It is as a result of reduced patronage that the company’s shares have plummeted by over 80% in 2023. Conn’s is now trading at less than $1.
Adding to the issues, Conn’s store recently received a delinquency notification from the NASDAQ Stock Market for delaying its quarterly financial filings. This delay has raised concerns about Conn’s ability to meet its financial obligations and maintain compliance with regulatory requirements.
Conn’s store closures and potential bankruptcy filing
Although there has been no direct declaration by the Conn’s store, the Bloomberg report however indicates that the store faced challenges in integrating Badcock Home Furniture & More, a Florida-based home goods retailer that was acquired in December 2023. The acquisition of this store was initially aimed at expanding Conn’s market reach and boosting sales. However, the reverse has been the case as it has strained the company’s resources and operational capabilities.
In the fiscal year ending January 31, 2024, Conn’s reported product sales of $903.7 million, down from $986.6 million the previous year. This decline is a result of the pressures of rising inflation on its customer base, which was primarily lower-income consumers, leading to reduced spending on discretionary items such as furniture and appliances.
Bloomberg also reported a potential Chapter 11 bankruptcy filing which might happen in weeks.
This move would allow the company to restructure its debts and operations in an attempt to stabilize its financial situation. However, the potential bankruptcy filing might put over 100 stores at risk of closure, with the key locations in Texas included. This would disrupt the livelihood of the employees in those locations. Currently, Conn’s Store operates over 550 stores across 15 states, employing around 4,000 people nationwide.
Impact of closure on employees and local communities
With the uncertainty surrounding the financial situation of the company, the employees and local community customers are left in a limbo state. In Texas alone, the company operates 85 stores, and potential closures could result in significant job losses. Local shoppers are not left out, especially those who relied on Conn’s for affordable home goods. They may have challenges finding alternative retailers that offer similar products at an affordable price.
