Thursday, March 2, 2017

Less Fear of Better Options: hhgregg to Close 40% of Stores

hhgregg to shutter stores

Struggling appliance and electronics retailer hhgregg today announced it will close 88 stores including four in metro Atlanta.  

"We are strategically exiting markets and stores that are not financially profitable for us," said Robert J. Riesbeck, hhgregg's President and CEO, in a prepared statement. 

The stores closures represent about 40% of the chain's current store count.  

"This is a proactive decision to streamline our store footprint in the markets where we have been, and will continue to be, important to our customers, vendor partners and communities. We feel strongly that the markets we will remain in are the right ones for our customers and our business model. Our team is dedicated to moving forward and being a profitable 132 store, multi-regional chain where we will continue to be a dominant force in appliances, electronics and home furnishings." 

“We have determined that the economics of the affected locations will not allow us to achieve our overall goal of becoming a profitable company again,” Riesbeck said. “After scrutinizing our real estate portfolio, we have identified a number of underperforming stores, as well as store locations that are no longer strong shopping destinations due to changes in the local retail shopping landscape.” 

The Atlanta closures include the hhgregg store in Buckhead at Buckhead Triangle.  The Buckhead store opened in October 2012 in a space that had previously housed Circuit City before their 2009 bankruptcy.  

Hhgregg will also shutter their stores on Pleasant Hill Road near Gwinnett Place Mall in Duluth, in Lithonia near The Mall at Stonecrest, and in Morrow on Mount Zion Road not far from Southlake Mall.   

A store representative indicated to me that liquidation sales will begin at all stores tomorrow with all in-stock merchandise on sale.  Sales are expected to continue for six weeks or until all stock is sold, which ever happens first. 

According to the company's website, hhgregg will continue to operate nine other stores in the greater metro Atlanta area including locations in Alpharetta, Smyrna, Snellville and Buford.  

The full announcement and store closure list can be found here.  

The other stores slated to close are in Alabama (2 stores), Delaware (3), Florida (15), Illinois (6), Louisiana (3), Maryland (11), New Jersey (2), North Carolina (4), Ohio (4), Pennsylvania (15), Virginia (16), Tennessee (1), Missouri (1) and West Virginia (1).  

Hhgregg will also close distribution centers in Miami, Brandywine, Maryland, and Philadelphia.  

In total, the closings will result in the elimination of approximately 1,500 jobs.

Indianapolis based Hhgregg announced February 15th that it was pursuing a range of  "strategic and financial options" with the help of third party financial advisers, to improve the company’s financial condition. Bloomberg reported February 23rd that the 61 year-old retailer was preparing to file for Chapter 11 bankruptcy reorganization, potentially as soon this month. 

Hhgregg, which currently operates 220 stores in 19 states, took a $58.3 million loss in its most recently completed fiscal quarter, with revenue plummeting 24%.

As recently as 2013, hhgregg's stock (HGG) was trading in the $20 range. Today, the stock, which was recently de-listed from the NYSE, trades at about 20 cents.  The stock was UP to 21 cents midday today, a 57+% increase over its 13 cent close yesterday.  

Hhgregg's store closure announcement follows announcements from Family Christian Stores, kmart, Sears and The Children's Place, all of whom have announced plans to close significant numbers of retail stores.  (Family Christian will close all 240 of their retail stores.)  

Are you surprised that hhgregg is closing so many stores? Where do you shop for appliances and electronics? What would you like to see open in place of the soon-to-close hhgregg stores in metro Atlanta?  

Please share your thoughts below.  

9 comments:

ImAndy said...

As a general rule I think people are abandoning stores that store clerks harass and follow you around. I'll do all my research for Electronics online and hope to find something at Costco I can just throw in a cart and walk out. The quicker Brandsmart and others convert to a cash and carry model the longer they will survive.

I was just in the market for furniture and it's another similar business. I found it so stressful but maybe I just dont like people in general. I will never ever walk into another Rooms to Go or Havertys again just as I've never purchased anything at HHGregg and havent been in one in at least 12 years.

Anonymous said...

Sad. I like HHGregg. If you know your product/price you can get a fair price from them. Better service then best buy. Brandsmart is like a circus. At least the ones near me will remain open. 😀

AJ said...

@Andy - You're not alone. It's fine if you greet me, but if I want to be left alone while browsing, LEAVE ME ALONE!

Coolio said...

I also hate sales people constantly bugging me when I want to arrive at my own decisions. If I need you, just be in an area where I can find you.

But overall...Bye. Please close the door behind you. The name of the store was/is supremely stupid anyway.

Cat said...

I shopped at HH Gregg for a refrigerator about 10 years ago. The sound coming from the car audio part of the store was deafening and the sales people didn't seem to care. It really turned me off of going there again. I know that conventional retailers have to adapt or die off, but there are things I don't want to buy online. Like clothes, or appliances, for example. I've generally been loyal to Sears and Macys for those things for many years. It makes me unhappy to think I may not have those options in the future.

jeff a. taylor said...

I had meh experiences w hh gregg for big appliances, got something there once, a dryer I think. But so long as Home Depot and Lowe's do kitchen/laundry appliances, you have to skew to them because their installers are gonna be better, at least in terms of maybe getting an actual plumber to put in a dishwasher, etc. Everything else, I buy online.

Anonymous said...

Gwinnett Place, Stonecrest, & Southlake --- those are the (ATL) locations that struggling national retailers cut first.

vespajet said...

@Anonymous (March 3, 2017 at 5:49 PM). Not always, as the Sears and the Macy's at Southlake seem to avoid the ax when it comes to store closings, even Best Buy has. With H.H. Gregg closing on Mt. Zion, that shopping center loses it's last big box retailer. Some of the big box spaces in that shopping center have been empty for over 8 years after those chains went under (Goody's and Linens N Things), and others (Old Navy and Staples) closed within the last few years.

J Leeds said...

I shopped at hh gregg one time. Bought a refrigerator, and they tried to deliver a different one. Had a dishwasher special ordered, and they tried to deliver a damaged one. Then they never delivered the dishwasher at all. After months of trying to get it, I finally got my money back.

Hardly a surprise that they're struggling. The customer service was absolutely awful.