Dive Brief:
- Conn’s is closing 71 of its namesake stores in 13 states, according to a list posted on its website. The stores slated for closure represent about 13% of the 550 locations the furniture and home goods retailer operated under two banners as of June.
- According to the company’s website, Conn’s is closing stores in Alabama, Arizona, Colorado, Florida, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas and Virginia. Florida is set to lose the most stores, with 18 listed for closure, followed by Texas, with nine stores.
- While only 70 locations are listed on the retailer’s website, a Bloomberg report from late last week said the company is shuttering 100 stores, 30 of which are Badcock locations. According to that report, Conn’s is also planning a bankruptcy filing in the coming weeks and is searching for financing for the process. Conn’s did not respond to a request for comment from Retail Dive on the filing or the closures.
Dive Insight:
Conn’s is shuttering stores as bankruptcy rumors swirl around the home goods retailer. The company grew to its current size with last year’s acquisition of furniture retailer W.S. Badcock, which at the time had nearly 380 stores in the Southeast. According to Bloomberg’s report, that acquisition contributed to Conn’s financial challenges.
Conn’s ended 2023 with a year-over-year net loss of nearly $77 million, up about 30% from the prior year. The store closure news follows confirmation from the company in June that it received a delinquency notice from Nasdaq after the retailer failed to file its Q1 report by the required date. The company has until Aug. 19 to submit a plan to regain compliance.
CreditRiskMonitor recently gave the Texas-based retailer a FRISK score of 2, which represents a 4% to a 9.99% chance of filing for bankruptcy in the next 12 months. Conn’s FRISK score has declined since May from a score of 4, which represents a 1.4% to 2.1% chance of bankruptcy. It has remained at 4 or below for over a year, according to CreditRiskMonitor.
CEO Norm Miller said in April that the company expected to maintain its current store count through the next fiscal year. Miller said the two banners had some overlap in Florida and North Carolina and said “there could be some consolidation,” according to an earnings call transcript.
Miller also said earlier this year that the acquisition would affect Q1 results. But he added that benefits of the company’s new integrated operating model should emerge in the second quarter and throughout the rest of the year, along with accelerated revenue and earnings growth.
However, “over the coming quarters, I am confident we will start to benefit from the powerful financial model we are creating, which is supported by our premium shopping experience, best-in-class payment offerings, leading e-commerce capabilities, and unique dealer network,” Miller said at the time.
Conn’s said it’s focused on near-term strategic priorities following the Badcock acquisition. They include transitioning Badcock customers to Conn’s in-house financing program; optimizing the merchandising strategy; integrating the supply chain and identifying cost cutting opportunities.
