When was the last time you went to a traditional retailer for any need?
If you belong to the younger consumer demographic, it's probably been a while.
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Even if you're past the ripe old age of, say, 25, you probably don't hit the specialty stores every week like past generations did.
For example, you might not visit the butcher shop to buy protein. You probably don't go to the cheese shop specifically to buy cheese. And you might avoid the farmers market altogether because you can get cheap organic produce at your local grocery store.
It's probably also been a while since you last visited the local mall. Nowadays, it's no longer necessary to go to a big brick-and-mortar retailer like JC Penney or Macy's when you can shop for formal wear, home decor, appliances, and cosmetics online or at discount stores closer to home.
This is one of the biggest and most disruptive modern retail trends of our time: specialty retailers are less in demand thanks to the accessibility of cheap, quality products online. Mom-and-pop stores or regional locals are being bought out en masse by big corporate stores, and many of us barely notice because we are far more interested in pricing power.
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Furniture is uniquely affected by inflation
However, if you own a regional furniture store, you may face even bigger problems, especially during economic downturns.
Larger national retailers like LAZ Boy and Wayfair have largely been able to stay afloat during tough times. During the COVID pandemic, for example, Wayfair saw a surge in traffic since it does most of its business online and the vast majority of its inventory is reasonably or inexpensively priced.
And customers looking for a more personalized, in-person experience know and trust a name like LA-Z Boy, which has been in business for more than 100 years.
But regional furniture chains are the hardest hit. Declining foot traffic, coupled with a lack of interest in making big purchases, could lead to a permanent stagnation in business.
Especially with high interest rates. Some people finance large furniture purchases, and when rates rise, the desire to improve the look of their living room suddenly takes a backseat on their priority list. And, with fewer people financing the purchase of a new home thanks to record-low mortgage rates, there's simply less of a need to buy new furniture in the first place.
Popular Texas chain closes stores
Such is the case with Conn's Furniture Plus, a Texas-based discount furniture chain that sells everything from mattresses to refrigerators.
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The discounter plans to close around 100 stores in the coming weeks as part of a broader plan to stave off losses. It has reported three consecutive years of fiscal losses and has been struggling especially since its acquisition of Badcock Home Furniture & More in late 2023.
According to people familiar with the matter, the retailer is also considering filing for Chapter 11 bankruptcy. It could do so in the coming weeks, depending in part on how the liquidation plays out, which could result in the permanent closure of more than 40% of Conn's locations.
Conn's currently operates approximately 85 stores in Texas and 550 nationwide, most of which are clustered in the South. The following states have at least one Conn's store:
- Texas
- Alabama
- Arizona
- Colorado
- Florida
- Georgia
- Louisiana
- Mississippi
- Snowfall
- New Mexico
- North Carolina
- Oklahoma
- South Carolina
- Tennessee
- Virginia
The closures would also affect around 30 Badcock stores.
However, plans are not yet finalized and Conn's has not officially said whether it plans to liquidate.
