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Conn’s Entering Arizona

Tucson, Ariz. – Conn’s is opening its first store in Arizona this week.

The showroom, located here, follows the opening in November of its first New Mexico store, in Albuquerque.

On a conference call following yesterday’s release of Conn’s record third-quarter earnings, chairman/CEO Theo Wright said the company will build out the Arizona market next year with new stores in Phoenix and other locales.

The multiregional furniture, majap and CE retailer hasn’t determined an ultimate store count for the new markets, he said, and will let performance determine the extent of the rollout. However, the two Southwestern states will be less saturated with stores than the metropolitan Texas markets where cannibalization compelled Conn’s to close multiple locations, he said.

The company plans to open 10 to 12 stores in total in 2013, which would give it upwards of 81 locations across five states including Arizona, Louisiana, New Mexico, Oklahoma and Texas.

Wright, who has led the company’s dramatic turnaround, noted that the Albuquerque store has performed well since its opening last month.

 During the quarter, ended Oct. 31, the chain enjoyed solid double-digit sales increases in all major product categories except TV, he said. Comparable store sales were up 34 percent in furniture and mattresses; 27.5 percent in home office; 23.1 percent in service contract commissions; 6.4 percent in majaps; and were down 3.2 percent in CE.

Wright noted that competitors’ Thanksgiving Day store openings impacted Conn’s Black Friday business, which fell 10 percent year-over-year, and that the company will likely revisit its holiday closure policy in 2013. Nevertheless, November comp sales rose 6 percent, he said, driven in part by a 20 percent spike in majap comps.

Despite weakness in TV, Wright said that unilateral pricing policies (UPP) are “definitely” helping TV margins without impacting sales.