Holiday Promos Hurt Sales At hhgregg, Conn’s - Twice

Holiday Promos Hurt Sales At hhgregg, Conn’s

Discounting drove unit but not dollar volume
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Fierce holiday discounting and month-long “Black November” promotions took a toll on two of the industry’s largest multiregional big-box chains.

Fierce holiday discounting and month-long “Black November” promotions took a toll on two of the industry’s largest multiregional big-box chains.

hhgregg president/CEO Dennis May said net and comp sales fell 11 percent during his company’s fiscal third quarter, ended Dec. 31, due to “the competitive pressures in the market.”

Broken out by category, appliance comps fell 10 percent; CE comps declined 8 percent; home products slipped 3 percent; and computers and tablets plunged 35 percent.

Bright spots included furniture, where comp sales rose 16 percent year over year, and 4K TV, which comprised 59 percent of the company’s TV mix, up from 50 percent during the prior quarter.

Net sales for the period were $593 million, down from $666 million in the prior year.

hhgregg operates 227 stores across 20 states.

Sales fared better at Conn’s, the 100-store chain that stretches from Colorado to the Carolinas. Retail revenues rose 2.5 percent to $137.5 million in December, driven by a nearly 14 percent increase in furniture and mattress comps.

But the market’s month-long series of “Black Friday” sales likely pulled business forward from December, president/CEO Norm Miller said, while increased promotions on opening price-point appliances drove unit but not dollar volume.

As a result, majap and home office comps each slipped 1.3 percent (excluding the jettisoned tablet category), and CE comps dropped 5.8 percent (excluding the since-exited gaming and imaging categories).

Sixty-day-plus delinquency rates on Conn’s in-house consumer financing continued to creep up, to 9.9 percent from 9.7 percent in December 2014.

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