by The plan comes as Conn’s reports disappointing Q1 results and becomes “more cautious” on its full-year outlook
THE WOODLANDS, Texas — Home furnishings, appliance and electronics retailer Conn’s is partnering with department store Belk for a pilot store-within-a-store concept in as many as 20 Belk locations and at the Belk website, www.belk.com.
The companies announced the partnership Wednesday, stating that it will be available later this summer and under a new, soon-to-be-announced brand. This brand will give Belk customers access to Conn’s home product categories, including furniture, as well as services such as white-glove, next-day delivery. The store-within-a-store footprints will range from 10,000 to 25,000 square feet based on the size of each Belk location.
The companies said that the concept will be tested in 10-20 Belk locations in Conn’s existing markets as well as online in the coming months. In addition to furniture, other categories will include brand name home electronics and appliances.
“Our partnership with Belk is an exciting opportunity to reach new customers with key differentiators including our high-quality product assortment, next-day delivery and in-house repair service,” said Chandra Holt, president and CEO of Conn’s HomePlus. “Our new store-within-a store pilot will launch under a new brand we plan to introduce in the coming months, reflecting our bold vision that everyone deserves a home they love.”
Don Hendricks, interim CEO of Belk said the partnership “will allow us to offer customers many products we don’t currently sell, making it easier for them to get everything they need for their homes in one convenient place.”
Belk currently has 300 locations in 16 Southeastern states, while Conn’s HomePlus has more than 160 locations in 15 states, while also offering a mix of logistics, distribution and in-home repair services. The companies said that the geographic overlap of their stores gives them an opportunity to “maximize Conn’s unique distribution capabilities in existing markets to serve new customers at Belk.”
The news came along with disappointing fiscal first quarter results for the credit-oriented Conn’s. Net income for the three months ended April 30, was $6.2 million, or 25 cents per share, compared to net income of $45.4 million, or $1.52 per share for the same period a year ago.
Total consolidated revenue declined 6.6% to $339.8 million, due to a 6.5% decrease in total net sales, and a 6.7% reduction in finance charges and other revenues, the company said. Same-store sales decreased 9.5%, but increased 9.9% on a two-year basis, while Conn’s e-commerce sales rose 71.7% to a first quarter record of $18.3 million, it said.
The furniture and mattress category, which represents 32.4% of sales, decreased 6.8% to $88.1 million. Same-store sales in the category were off 10.3%.
The Q1 performance was impacted by “lapping government stimulus, continued third-party lease-to-own tightening, and a challenging macro environment,” Conn’s CEO Chandra Holt said in a release.
“These trends disproportionately impacted sales for our financial access customer … while sales to our fast and reliable customer segment increased year-over-year for the 12th consecutive quarter. Retail performance was also impacted by higher year-over-year supply chain, freight and fuel costs. Going forward, our outlook for the remainder of the year has become more cautious as a result of worsening economic conditions.”
Executive Editor Clint Engel contributed to this report.
