Looking for some new furniture? You might find a deal soon.
Texas-based furniture store Conn’s plans to close about 100 locations and liquidate the inventory as part of a bankruptcy filing, according to Bloomberg.
Why is Conn’s considering bankruptcy?
Conn’s has been struggling in recent years, facing three consecutive fiscal years of losses. Customers, feeling the pinch of rising living costs, have cut back on discretionary spending, including furniture purchases.
As a result, the company’s shares have plummeted by over 80% in 2023 and are now trading at less than $1.
According to the source, the Bloomberg report indicates that the store faced challenges in integrating Badcock Home Furniture & More, acquired in December 2023.
Bloomberg suggests that a potential Chapter 11 bankruptcy filing may occur within a matter of weeks. However, discussions are ongoing, and plans could change.
What is Chapter 11 bankruptcy?
Chapter 11 bankruptcy, also known as reorganization bankruptcy, allows a company to continue operating while it develops a plan to repay its creditors.
During Chapter 11 bankruptcy, the company is protected from creditors and can continue to pay its employees and suppliers.
The goal of Chapter 11 bankruptcy is to allow the company to restructure its debt and emerge from bankruptcy as a viable business.
Here’s the process of filing for Chapter 11 bankruptcy:
- The company files a petition with the bankruptcy court.
- The court appoints a trustee to oversee the bankruptcy process.
- The company develops a plan to repay its creditors.
- The plan is voted on by the creditors.
- If the plan is approved by the court, the company can emerge from bankruptcy.
How many Conn’s stores are in Texas?
There are 85 Conn’s operating in Texas and more than 150 locations in the U.S. It’s unclear which locations in Texas will close.
On December 18, 2023, the Woodlands, Texas-based retailer acquired Badcock, a Mulberry, Florida-based company, from Franchise Group in a transaction involving solely stocks.
The acquisition added approximately 380 stores in the Southeastern region, expanding the retailer’s existing portfolio.
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Here are the states where Conn’s currently operates:
- Texas
- Alabama
- Arizona
- Colorado
- Florida
- Georgia
- Louisiana
- Mississippi
- Nevada
- New Mexico
- North Carolina
- Oklahoma
- South Carolina
- Tennessee
- Virginia