Conn’s files for bankruptcy with plans to shut down
Conn’s is going out of business.
In a not unexpected move, the struggling, Texas-based retailer of furniture, mattresses, appliances and consumer electronics filed for Chapter 11 bankruptcy protection. According to court documents, Conn’s plans to wind down its business, including closing its 553 stores, which are located across 15 states and operate under two banners: Conn’s HomePlus and Badcock Home Furniture & More. Of the total, 310 are dealer-owned.
The retailer is requesting court approval to complete going-out-of-business sales by Oct. 31. It also is seeking permission to reject store leases. Conn's made the decision to wind down operations after failing to raise enough money to keep funding itself while searching for a buyer of the whole business, reported Bloomberg.
Prior to the filing, Conn’s said it had started liquidation sales at 71 stores and listed the locations on its website.
In its filing, Conn’s reported assets and liabilities each ranging from $1 billion to $10 billion. The company’s top creditors are Samsung, which is owned about $20.9 million; LG Electronics, which is owned $13.8 million; and General Electric, which is owed $13.3 million.
Conn's has been struggling amid increased competition and a general downturn in consumer competition spending on discretionary purchases, including furniture. The company's total consolidated revenue declined 7.8% to $1.2 billion in 2023, with a 9.1% decline in total net sales and a 3.6% reduction in finance charges and other revenues.
In June, Conn’s received a delinquency notification from the Nasdaq Stock Exchange, indicating it was not in compliance with Nasdaq Listing Rule 5250 (the Rule) because of the company’s delay in filing its most recent 10-Q report for the quarter ended April 30. Conn’s was given 60 days, or until Aug. 19, 2024, to submit to Nasdaq a plan to regain compliance.