Furniture retailer Conn’s Inc. is planning to shutter around 100 locations and liquidate the inventory as part of a bankruptcy filing planned for the coming weeks, according to people with knowledge of the matter.
The company, based in The Woodlands, has also been huddling with investors in search of financing to help fund its bankruptcy process, according to some of the people, who asked not to be named discussing private information.
The store closings would amount to nearly 20% of its footprint and more than 40% of the stores it controls. The company in an April presentation said it had more than 550 locations, though 378 were dealer-owned as part of its franchise model.
Conn’s has 15 locations in the Dallas-Fort Worth region.
The plans are not final and could change. A representative for Conn’s did not respond to a request for comment.
Conn’s has faced three fiscal years of losses as pinched customers cut back to afford the rising costs of necessities. The company’s shares have fallen by more than 80% this year and currently change hands for less than $1.
Closures would include about 30 stores under the banner of home goods retailer W.S. Badcock, which Conn’s acquired last year from Franchise Group Inc. in an effort to expand its reach, according to one of the people. That acquisition ultimately contributed to financial burdens weighing the chain down, including debt and high overhead.
Among those likely impacted by the company’s plans is the boutique investment bank B. Riley Financial Inc., which is on the hook for a loan made to Conn’s in December when it bought W.S. Badcock.
B. Riley has said it expects to be fully repaid in any scenario. A representative declined to comment on the store closures.
- Eliza Ronalds-Hannon and Reshmi Basu for Bloomberg
