TEXAS (WJET) — Conn's HomePlus, a 134-year-old home goods store known throughout 15 states, filed for Chapter 11 bankruptcy Tuesday and is set to close 71 of its 170 stores.
The Texas-based furniture and appliance store is prevalent in the southern United States. Conn's also recently merged with W.S. Badcock, which will see 36 of its 374 locations close.
According to the filing, Conn's holds over $2.4 billion in assets and nearly $2 billion in debts to over 25,000 creditors. The company is currently exploring the possible sale of the business and is engaged in extensive discussions with a potential purchaser.
As a result of the filing, Conn's is holding a sitewide sale with prices of 30-50% off. They are also holding going-out-of-business sales at the Conn's and WSB in-store locations, which are set to close by Oct. 31.
Like many companies this year, these brick-and-mortar stores are struggling to keep up with the changes in customer shopping habits. Conn's has seen a major shift in customer spending on furniture and other discretionary purchases largely due to the COVID-19 pandemic, where more customers shifted to shopping online rather than in-store. However, despite this shift, several Conn's locations saw customer spending skyrocket, particularly on durable goods.
Another common theme this year has been inflation, and Conn's has seen increasing costs of goods, rising wage expenses and increased service prices. As a result, many customers are delaying financing for discretionary purchases. Additionally, the company reports that its interest rate expense increased from $25.7 million in 2020 to $81.7 million in 2023.
Costs from underperforming stores have accounted for $35 million of the company's total $77.4 million in lease payments which the company is hoping to decrease with the closures of underperforming locations.
Conn's is also dealing with additional financial stress caused by their recent acquisition of W.S. Woodcock in December 2023. Although they say the merger has allowed the company to reach a broader customer base, the realization of the costs will take an estimated 12-18 months.
