Conn's HomePlus identified over 100 stores it plans to close initially and warned of a possible liquidation after filing for Chapter 11 bankruptcy protection, just the latest furniture and home goods retailer to flounder after a pandemic sales surge eased.

The Woodlands, Texas-based company on Tuesday sought protection in the U.S. Bankruptcy Court for the Southern District of Texas in Houston. It said it has 25,001 to 50,000 creditors, $1 billion to $10 billion in assets and $1 billion to $10 billion in liabilities.

Before filing its petition, publicly traded Conn's and its Badcock Home Furniture & More chain on their websites had begun announcing store closings. In court documents, Conn's listed 70 of its namesake stores and 35 Badcock locations that it plans to shut, a total of 105 sites or about 20% of its fleet.

It marks a major challenge for a company that President and CEO Norman Miller said in an affidavit grew from a home-appliance retailer operating out of a single storefront in Beaumont, Texas, in the early 1900s into a national retailer with 553 corporate and dealer stores, 22 distribution and service centers and six corporate offices across the Southeast, mid-Atlantic and Southwest.

During the height of the pandemic in 2020, Conn's had higher sales as Americans sought to spruce up their homes and later had federal stimulus money to spend, according to Miller. Other retailers in the furniture-home goods sector also saw a boost. But that revenue later nosedived because of the impact of inflation and higher interest rates on discretionary spending by consumers, who tightened their purse strings to buy necessities or to focus on experiences.

In the aftermath, Bed Bath & Beyond, Z Gallerie and Mitchell Gold + Bob Williams filed for bankruptcy within the past year and closed their stores. This year, Big Lots has warned it may cease operations and is closing 140 stores, while Wayfair is reducing its workforce.

Conn's financial situation has grown so dire that it is seeking court approval to wind down its business while seeking a buyer.

"In light of the poor [mergers and acquisitions] environment in the consumer retail sector and macroeconomic headwinds faced by the company, the debtors have commenced these Chapter 11 sales to obtain the time and breathing room necessary to continue store closing sales at their retail locations, as well as pursue a court-supervised marketing and sale process for the company’s assets for the benefit stakeholders," Miller said.

In addition, the CEO said Conn' s officials have kicked off the process of running going-out-of business sales at the remainder of their locations "and to market and sell substantially all of their assets, including their owned loan portfolio, lease designation rights, servicing business, and all other assets."

Conn's expects to continue that process under the supervision of the court in order to maximize the value of its assets "and, ultimately, [is] seeking confirmation of a liquidating plan," according to Miller.

Conn's didn't immediately respond to a phone call on Wednesday from CoStar News seeking a comment.

The chain's merchandise array includes home appliances, furniture, mattresses, consumer electronics and accessories, personal computing devices and related software.

Conn's purchased furniture retailer Mulberry, Florida-based W.S. Badcock, which does business as Badcock Home Furniture, in December. It operates 374 stores in the Southeast, primarily in Florida and Georgia, according to Miller.

He outlined Conn's real estate-related challenges in his affidavit, saying the cost of the company’s roughly 350 leases is "exacerbated" by "the underperforming leased stores and location functionality." In fiscal 2024, Conn's spent about $77.4 million in lease obligations, with $35 million of that relate to underperforming stores, according to Miller. In addition, the W.S. Badcock merger resulted in some redundant store locations that increased the drag on the company’s operations from lease expenses, he said.

"Although the company pursued two separate initiatives in the last 12 months to engage with counter parties and reduce lease expense, each of those initiatives fell short in substantively reducing the impact of lease terms," Miller said.

He added that "given the company’s operational headwinds and financial position, payment of lease obligations associated with non-performing leases has caused significant strains on the company’s liquidity."

Conn's conducted negotiations with lenders and potential stalking-horse purchases, according to Miller, but determined it wasn't feasible to strike a deal that provided the necessary liquidity to fund a going-concern sale process under the supervision of the court.

"Accordingly, the debtors determined that an orderly wind-down of their business would maximize the value of their assets," Miller said.

In court documents, Conn's is seeking approval to continue and/or initiate store-closing sales at all its retail locations and that such store-closing sales be completed by Oct. 31, as well as seeking approval of procedures to reject leases. The company occupies more than 11 million square feet of retail space.