Is Conn’s Really Going Out of Business

Is Conn's Really Going Out of Business? Here's What You Need to Know

For many years, Conn's HomePlus has been a familiar name for furniture, appliances, and electronics, particularly known for its in-house financing options. If you've recently heard whispers or seen headlines suggesting the company is in trouble, you're not alone. Many consumers are asking: Is Conn's really going out of business?

The answer, unfortunately, is a definitive yes. Conn's HomePlus has filed for bankruptcy and is in the process of closing all its physical retail locations and its website. This comprehensive article will break down what led to this decision, what it means for customers, and the broader implications for the retail sector.

The Definitive Answer: Conn's is Closing All Stores

After 134 years in business, Conn's HomePlus has officially filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas. This filing, which occurred in July 2024, signals the company's plan to wind down its entire business operation.

This means that all 174 Conn's HomePlus locations across 15 states are slated for closure, along with the company's website. Furthermore, the closure extends to the W.S. Badcock Home Furniture & More chain, which Conn's acquired in December 2023, bringing the total number of affected stores to over 500. "Going out of business" sales are currently underway at these locations, offering significant discounts on merchandise.

A Look Back: What Led to Conn's Downfall?

The path to bankruptcy for Conn's was paved by a combination of financial challenges and strategic missteps.

Financial Struggles and Declining Sales

Conn's had been facing significant financial headwinds for some time. The company reported a net loss of nearly $77 million for the fiscal year ending January 31, 2024, representing a roughly 30% increase in losses compared to the prior year. Total consolidated revenue also saw a decline of 7.8% in fiscal year 2024, primarily due to a 9.1% drop in net sales.

The company's financial reports indicated a consistent trend of declining sales and revenue, particularly as inflation impacted discretionary consumer spending on home-related products.

The Impact of the Badcock Acquisition

A crucial factor contributing to Conn's financial woes was its acquisition of W.S. Badcock Home Furniture & More in December 2023. While initially intended to create a larger home goods retailer with an estimated $1.85 billion in combined retail sales, the merger did not yield the expected financial uplift and, according to reports, contributed to Conn's challenges. The acquisition resulted in some redundant store locations and exacerbated what the company termed "location functionality" issues.

A Business Model Under Pressure

Conn's business model heavily relied on its in-house financing program, catering to customers with subprime credit scores (typically between 525 and 650). While this strategy provided a unique selling proposition and access to credit for many, it also came with inherent risks, especially in a challenging economic environment. The company's credit segment experienced increases in the provision for bad debts, further straining its financial health.

What This Means for Customers and Employees

The closure of Conn's HomePlus has direct implications for its customers and the thousands of employees.

For Customers with Outstanding Financing

If you have an outstanding balance on a Conn's financing plan or credit card, you are still obligated to make payments. Your financing agreement is considered an asset of the company and will likely be sold to a third-party debt collector or another entity. This means you may end up making payments to a different company, potentially under different customer service conditions. It's crucial to continue making your payments to avoid negative impacts on your credit score.

For Warranties and Returns

Details regarding the handling of existing product warranties and return policies during the liquidation process will depend on the terms of the bankruptcy and the specific items purchased. Customers with active warranties or recent purchases should check the company's official bankruptcy filings or contact customer service channels (if still active) for guidance. During "going out of business" sales, return policies are often significantly restricted or eliminated.

For Gift Cards

Typically, once a company files for bankruptcy and begins liquidation, gift cards may become worthless or only redeemable for a limited time during the initial stages of the going-out-of-business sales. It is advisable to attempt to use any Conn's gift cards immediately, though their acceptance is not guaranteed at this stage.

Impact on Employees

The complete closure of Conn's and Badcock stores will unfortunately lead to significant job losses. At the time of its bankruptcy filing, Conn's employed 3,800 people across 15 states.

The Broader Retail Landscape

Conn's is not the only retailer to face significant challenges in recent times. The current economic climate, marked by inflation and shifting consumer habits, has put immense pressure on brick-and-mortar retailers. Several major chains have announced store closures or filed for bankruptcy, reflecting a broader trend of declining in-person shopping and increased competition from online retailers.

Conclusion

The news that Conn's HomePlus is going out of business marks the end of an era for a retailer that served communities for over a century. The Chapter 11 bankruptcy filing and subsequent liquidation of all stores underscore the harsh realities of the modern retail environment, exacerbated by specific financial and strategic challenges faced by the company.

For customers, the key takeaway is to understand your obligations regarding any outstanding financing and to be aware of the implications for warranties and gift cards. While the closure is certainly a loss for its loyal customer base, it also highlights the importance of diversifying your financial options beyond single-retailer credit.

Were you a long-time Conn's customer? Share your experiences or any questions you have about the closures in the comments below.

Frequently Asked Questions (FAQ)

Q1: Has Conn's HomePlus filed for bankruptcy?

Yes, Conn's HomePlus filed for Chapter 11 bankruptcy protection in July 2024.

Q2: Are all Conn's stores closing?

Yes, all Conn's HomePlus physical retail locations, along with its website and the Badcock Home Furniture & More stores, are closing.

Q3: What happens to my Conn's financing or credit account?

You are still obligated to make payments on any outstanding financing or credit accounts. These loans are assets of the company and will likely be sold to a third-party debt collector, meaning you may need to make payments to a different entity.

Q4: Can I still use my Conn's gift card?

While going-out-of-business sales are underway, the acceptance of gift cards can be limited or cease entirely once a company enters liquidation. It is advisable to attempt to use any gift cards immediately, though their redemption is not guaranteed.