The Woodlands, Texas — Multiregional furniture, majap and CE chain Conn’s appears to have turned a corner in its efforts to stem losses from its in-house consumer credit operation.
The company said customer delinquencies in January that are less than 60 days overdue declined from December and continue to be well below the year-ago period, reflecting “strong” collections, an improved payment rate and stricter underwriting standards.
Greater than 60-day delinquency was flat for the month, the chain said.
Easy in-house credit has long been the cornerstone of Conn’s business model, but rising delinquencies amid the tough economy pushed the company into the red last quarter. The crisis prompted the departure of chief financial officer Brian Taylor, the creation of new president and chief risk officer roles, and the hiring of a financial advisor to explore strategic options, including a possible spin off of the credit segment or even the sale of the company.
Despite the credit crunch the chain’s retail segment under retail president David Trahan continued to perform. Net sales rose nearly 17 percent in January to $93.6 million, and were up 16.2 percent, to $350.5 million, for the fiscal fourth quarter, ended Jan. 31.
Comp sales increased 5 percent in January and 1.3 percent for the quarter, impacted by tighter underwriting, particularly in Arizona and New Mexico, chairman/CEO Theo Wright said.
Broken out by category, higher average selling prices in CE offset flat unit volume to push comps up 7.7 percent in January. TV comps increased 3.1 percent, “and we continue to experience strong sales in gaming,” Wright said, although a 47 percent decline in tablet comps sent the home office category down 8 percent.
Elsewhere, majap comps rose 7 percent; furniture and mattress comps increased 9 percent; and comps for commissions from extended-service contracts were up 5 percent in January.
The company operated 90 stores in 11 states at the end of the quarter.