Did you know that Conn’s originally operated as a plumbing and heating service in Beaumont, Texas, much before it became known for electronics and furniture?

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In 1933, Carol Washington Conn Sr. took the helm, rebranding the company to Conn Plumbing and Heating. By 1937, recognising the growing demand for household appliances, Conn introduced refrigerators and gas ranges to the product lineup, laying the foundation for the company's future in retail.
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The post-war era saw Conn's expanding its footprint, opening multiple stores across Texas and Louisiana. This period was characterised by a commitment to providing quality home appliances and establishing a reputation for reliable customer service.​
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The catch was a nostalgic loyalty among shoppers, who never knew what they might find on a Big Lots trip.

Perceived Value Proposition:

• In-house Credit Financing: Conn’s carved out a strong niche by offering in-store credit financing to underbanked or subprime customers, particularly in the Southern U.S. This helped customers who couldn’t access traditional credit to purchase furniture, appliances, and electronics.
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• Bundled Shopping Experience: Conn’s stores were built as one-stop shops where consumers could get electronics, mattresses, and home appliances all in one trip.
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• Customer Loyalty: Conn’s focused heavily on building regional loyalty in areas like Texas and Louisiana, where the brand became synonymous with mid-income home furnishing.

Quirky Marketing Campaigns created Brand Recall:

• “Finance Is Not a Bad Word” (2023): Perhaps its most controversial campaign, Conn’s leaned hard into repositioning the idea of store financing. The ads provocatively played on the "F-word" theme, suggesting financing wasn’t taboo, but it backfired. Many consumers found the messaging confusing or off-brand during a time when financial anxiety was high.
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Did you know that at the time of filing for bankruptcy, Conn's owed $2 billion in debts to over 25,000 creditors?

• “Yes Money” Slogan: Conn’s ran a long-standing campaign based on the pitch: “We say YES when others say NO,” referencing their willingness to finance subprime customers. While effective in underserved markets, it encouraged high-risk borrowing and eroded brand perception in more affluent segments.

Financial Success, but Started Spreading too thin:

• 2003: With IPO on NASDAQ, Conn's was able to access capital markets and fund store expansion across the South.
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• 2013: The company saw its strongest performance in the early 2010s, with revenues reaching $1.23 billion and steady year-over-year same-store sales growth fueled by in-house credit sales.
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• 2020: Like many retailers, Conn’s saw a temporary surge in sales during the COVID-19 pandemic as consumers spent stimulus checks on home goods and electronics.

Cracks started to show up:

• Overextension through Acquisition:In December 2023, Conn's acquired W.S. Badcock Corp. However, this acquisition strained the company's finances, adding significant debt and operational complexities.
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• Declining Sales and Financial Losses: The fiscal year ending January 31, 2024, reported revenues of $1.238 billion, a 7.8% decrease from the previous year, with a net loss of $76.89 million.
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• Marketing Misfires:In an attempt to rejuvenate its brand image, Conn's launched the "Finance Is Not a Bad Word" campaign in October 2023. While aiming to normalise financing options, the campaign's provocative approach received mixed reactions and failed to resonate with the broader customer base.

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Did you know that Conn’s was one of the earliest regional retailers to offer proprietary in-house financing?

Major Trigger of Brand's Downfall:

Conn’s purchase of W.S. Badcock Corp. for $580 million in 2023 was meant to expand its customer base and geographic footprint, but instead, it significantly strained cash flow, added operational complexity, and saddled the company with debt during a high-interest-rate environment.
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This move, done without clear synergies or integration strategy, became the tipping point when paired with declining foot traffic and an economic downturn.

5 Lessons for Startups from Big Lots’s $5.3 Billion Failure:

1. Never Abandon Your Core Value Proposition: Conn’s was already facing declining store sales and customer credit delinquencies when it chose to acquire Badcock in late 2023. Instead of stabilising its financial performance, it doubled down on physical expansion.
   ​Before you scale or acquire, audit your current business model for cracks​
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2. Be Cautious with Debt and Expansion: The company was known for issuing in-house credit to subprime customers but failed to build a modern, adaptive risk assessment model as macroeconomic conditions changed.
   ​Expansion should be driven by tested financials and positive unit economics.
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3. Adapt Quickly to Market Shifts: The 2023 “Finance is Not a Bad Word” campaign tried to rebrand the company as edgy and inclusive. But it was tone-deaf to its actual customer base, many of whom were already skeptical of credit offerings or facing financial distress.
   ​Your messaging needs to match brand perception and consumer reality.
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4. Digitise fast: Despite e-commerce pressure, Conn’s made only modest efforts to digitize, instead relying heavily on physical stores and in-person financing. Even during COVID, their digital investments lagged.
   ​Make sure your offline and online experiences are seamlessly integrated,
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5. Be Prudent with Debt: Conn’s financed its growth and acquisition with significant debt just as interest rates rose and consumer discretionary spending shrank.
   ​If you’re debt-funded or highly leveraged, ensure your burn rate and margins can withstand economic shocks