Fire sales to continue through the fall
By Alan Wolf, YSN
Conn’s, the sprawling 134-year-old home goods retail chain, is going out of business.
The Texas-based box store, which sells a mix of furniture, appliances, electronics and bedding, filed for Chapter 11 bankruptcy protection earlier this week and has since initiated companywide clearance sales.
The 553-store retailer built its business around easy financing for credit-challenged customers and grew to span 15 states across the southern half of the country, from Nevada to Virginia. More recently, however, it overextended its own finances with last December’s purchase of W.S. Badcock, operator of the 380-showroom Badcock Home Furniture & more home furnishings chain.
Cause and Effect
In the bankruptcy filing, CEO Norm Miller cited “a convergence of factors” for the company’s failure, including rising interest rates, “macroeconomic headwinds” and changing consumer behaviors. The debt load associated with the Badcock buy and the high cost of capital proved to be the final nails in Conn’s coffin.
The company has initially targeted 71 Conn’s Home Plus and 35 Badcock Home Furniture stores for closure, and BrandSource members in the chain’s remaining markets can expect short-term disruptions from the fire sales, which are expected to continue through Oct. 31. The retailer’s eventual departure will free up market share for independents who can capture its customer base through AVB’s consumer financing programs, and will provide real estate opportunities for large-format dealers.
Conn’s was founded as Eastham Plumbing and Heating in Beaumont, Texas in 1890. It was acquired during the Great Depression by Carroll Wayne Conn, Sr., who added refrigerators to the assortment in 1937. It launched an in-house consumer financing operation in 1964 and beginning in the late 1990s pursued a course of aggressive expansion that made it a major multi-regional player in the appliance market. The company added furniture and mattresses to the mix in 2011.
