Fifteen-state furniture, appliance and CE chain cites macro headwinds
By Alan Wolf, YSN
A new series of pronouncements from Conn’s HomePlus, the 160-store appliance, home furnishings and CE powerhouse, could be a bellwether for a marketplace buffeted by high inflation and rising interest rates.
The Texas-based box chain, which stretches across 15 states from Colorado to the Carolinas, warned investors this week that it remains challenged by “macroeconomic headwinds” that are impacting consumer spending and are disproportionately affecting sales of discretionary product categories.
Conn’s is further impacted by a customer base that is largely comprised of credit-constrained consumers who are drawn to the company’s high-risk portfolio of payment options, including lease-to-own, private-label revolving credit and in-house financing. That said, low-income shoppers tend to be the canaries in the cage who are usually the first to feel the pinch of economic uncertainty.
Those challenges contributed to a projected 21-23% decline in fiscal third-quarter revenue and operating margin in the negative mid-single digits.
To address the downturn, Conn’s dismissed its president and CEO, former Walmart.com and Sam’s Club senior exec Chandra Holt, who left this week after 14 months, and brought back past chairman and chief executive Norm Miller, who will serve as interim president/CEO.
“I am excited to return to Conn’s and help the company reestablish its core customer value proposition,” Miller said. “Our differentiated credit offerings power a compelling model that we believe is needed now more than ever as consumers across the country are impacted by record inflation and growing economic uncertainty.”
The company said it is also focusing on improving margins and reducing or eliminating unnecessary costs.