Another big brand filed for bankruptcy! Facing hundreds of millions of debts

Since last year, many major American home furnishing brands have collapsed.

Recently, news came out that Conn's HomePlus, an American home furnishing retail giant with a history of more than 100 years, filed for bankruptcy.

Conn's HomePlus files for bankruptcy

It is understood that Conn's HomePlus has applied for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas. The bankruptcy documents show that Conn's HomePlus' assets and liabilities are at least US$1 billion.

After declaring bankruptcy, Conn's HomePlus' website began a closing-out sale, with all products sold out while supplies last.

(Image source: Conn's HomePlus official website)

Conn's HomePlus also announced on its official website that it will close 18 stores in Florida, 9 stores in Texas and 7 stores in Arizona, as well as stores in Virginia, Colorado, Mississippi and Oklahoma, totaling at least 70 stores in 13 states.

In order to recover funds as quickly as possible to offset debts , all products on the official website of Conn's HomePlus are currently discounted from the original 50% to 70% off to 10% to 30% off.

The company is also in discussions with potential buyers to sell all or part of the business and preserve jobs .

Conn's HomePlus was founded in Texas, USA in 1890. The company has a history of more than 100 years. Its main businesses include selling furniture and mattresses, home appliances, consumer electronics and home office products. The company also provides short-term and medium-term financing to its retail customers, as well as product support services, including next-day delivery and installation services, credit insurance products, product repair services and repair service agreements.

Conn's HomePlus' main sales channels are physical stores and official websites. Among them, stores sell furniture, mattresses, electronic products and electrical appliances, and the official website provides online shopping services. Conn's HomePlus's products can be delivered the next day, and installation services are also provided.

After years of development, Conn's HomePlus has grown into a chain group selling furniture, mattresses, electronic products and electrical appliances, with hundreds of offline stores. Conn's HomePlus has gained wide recognition from consumers with its rich product line and high-quality services.

As early as November 2003, Conn's HomePlus was successfully listed on the NASDAQ Stock Exchange in the United States.

As the company grows rapidly, Conn's is also expanding its business through acquisitions.

In December 2023, Conn's acquired another home furnishing retailer, WS Badcock. After acquiring WS Badcock's stores, the total number of offline stores of the two major brands, Conn's and Badcock, reached about 500.

Conn's hoped to expand its product market share and integrate the supply chain through this acquisition, but it failed to achieve its goals. Instead, it increased the company's financial burden. Conn's was unable to digest the resource advantages of Badcock's offline stores.

In April 2024, Conn's stated in its fourth-quarter earnings conference call that the company's total operating income fell 7.8% from the same period last year, and the company's full-year net loss was approximately US$77 million.

Conn's bankruptcy was the result of a combination of factors, including internal financial and strategic decision-making problems, as well as external market environment and competitive pressure.

In recent years, Conn's has relied on issuing debt to support cash flow for its operations and strategic plans, but as interest rates have risen, interest expenses have also increased, resulting in the company's poor cash flow and excessive debt burden.

The home furnishing market was highly competitive, and coupled with the pressure of high inflation, consumers' shopping behavior had also changed. Coupled with the pressure of supply chain management, Conn's financial situation continued to deteriorate, and it was eventually forced to seek bankruptcy protection.

The “dangers” and “opportunities” of the American home furnishing industry !

The American home furnishing market has been hit hard. Since last year, many major American home furnishing brands have fallen into crisis.

In February 2023, Tuesday Morning, a discount home furnishings retailer that once had 700 stores across the United States, filed for bankruptcy and eventually closed all of its stores.

In April 2023, American home furnishing giant Bed Bath & Beyond filed for bankruptcy and immediately closed 896 physical stores across the United States.

In October 2023, Z Gallerie, a long-established American furniture retailer, filed for bankruptcy.

In April 2024, the American home furnishing chain giant Pirch declared bankruptcy due to debt problems, with total debts as high as US$238 million.

Amid the wave of bankruptcies, many American home furnishing retailers attributed the cause to continued high inflation and rising interest rates. American consumers reduced their daily spending, resulting in setbacks in offline store operations.

Despite this, home furnishing retailers that are in the midst of bankruptcy crisis can still usher in a new turnaround.

After experiencing a bankruptcy crisis, American home furnishing giant Bed Bath & Beyond has made a strong comeback and will restart sales in physical stores.

Bed Bath & Beyond was previously acquired by Overstock.com for $21.5 million in June 2023, after declaring bankruptcy.

After the acquisition, Bed Bath & Beyond transitioned to online sales and closed all of its physical stores.

In September 2024, Beyond.Inc (Bed Bath & Beyond's parent company) announced Bed Bath & Beyond's physical store return plan, planning to bring Bed Bath & Beyond back to offline channels through three physical store models including community stores, large stores, and Overstock stores.

Beyond Inc. invested $40 million in The Container Store, providing much-needed financial support to the home furnishings retailer, which is also in deep financial trouble.

As part of the investment, Bed Bath & Beyond branded kitchen, bath and bedroom products will soon be available in 102 of the Container Store’s stores.

Another long-established home furnishings retailer, Z Gallerie, filed for bankruptcy in October 2023 and was formally acquired by Jesse, one of the well-known companies in the cross-border e-commerce home furnishing category, through its US subsidiary Karat Home.

In addition to all Internet assets and data related to Z Gallerie's e-commerce business, the acquired assets also include the remaining inventory of Z Gallerie's logistics distribution center as of the closing date of the transaction, as well as the products shipped to the logistics center.

Scarlett Fan, General Manager of Jesse Home Furnishings, said, "Z Gallerie has high-quality brand assets and a loyal customer base, which is a perfect fit for Karat Home's development strategy. We believe that this acquisition will help Karat Home grow rapidly and become the leading home furnishing e-commerce platform in North America."

Industry insiders commented that Jessica's move was to strengthen its layout in the cross-border e-commerce field and was a good deal.

Because Z Gallerie has a rich product line that covers multiple categories such as furniture, accessories, and lamps, it can enhance the competitiveness of Karat Home's products in the future.

On the other hand, Z Gallerie has a certain market recognition in the United States and will help Karat Home enhance its brand influence in the future.

In general, after being acquired by Jesse, Z Gallerie not only alleviated its financial problems, but also gained new opportunities in business development and market expansion, especially in the e-commerce business and smart home fields.

Although many U.S. home furnishing retailers are currently under certain pressure to grow their business, overall, the U.S. home furnishing industry still maintains a growth trend.

In 2023, the U.S. home furnishing industry's sales revenue was US$243.79 billion, a year-on-year increase of 3.64%, an increase compared to the growth rate of 2.09% in 2022.

For companies that are planning to enter the home furnishing category, while seizing market opportunities, they should also adjust their operating strategies in a timely manner according to market changes.

Home Furnishing Brands

Bankruptcy