HHGregg is closing all of its stores. Liquidation sales at the appliance and electronics chain begin on April 8. All 220 stores in 19 states will soon shut their doors forever in the coming weeks. HHGregg was the seventh-largest appliance retailer in America, behind Lowe’s, the Home Depot, Sears, Best Buy, Sears Hometown, and Walmart.
Last month HHGregg officials from the Indiana-based company said 88 underperforming stores were going to be slated for closure. Then, just a few days later, the company filed for Chapter 11 bankruptcy protection. A letter of intent for a potential buyer of its assets was terminated following the legal filing, the Ledger-Enquirer reports.
“Since filing for financial protection under Chapter 11 of the Bankruptcy code on March 6, 2017, we have continued to fight for the future of our company,” HHGregg President and CEO, Bob Riesbeck, said. “While we had discussions with more than 50 private equity firms, strategic buyers and other investors, unfortunately, we were unsuccessful in our plan to secure a viable buyer of the business on a going-concern basis within the expedited timeline set by our creditors.”
JUST IN: HHGregg announces company wide closure, plans to liquidate assets.https://t.co/p9MdWIUphk
— CBS4 Indy (@CBS4Indy) April 7, 2017
A bankruptcy court for the Southern District of Indiana approved the request by HHGregg to liquidate its assets late yesterday afternoon. A company has been hired to oversee the going out of business sale of not only store merchandise, but office furniture, store fixtures, and any other equipment of value at retail locations and distribution centers. Shoppers in many of those same states have also seen their local Sears and Kmart stores close over the course of the past year.
The HHGregg going out of business sale also means customers have just a few weeks left to return any previously purchased items they do not want or do not work and to use up gift cards. Because of the liquidation sale, the company has announced it will limit the return of goods on any items which were purchased before March 6 to purchases which cost $2,850 or less. Many of the furniture sets, televisions, and major appliances sold at the store carried a lot higher price tag than the noted amount, the INDYStar notes.
HHGregg’s rapid descent, already remarkable, has accelerated. https://t.co/OZ9CIIOzZO
— James Briggs (@JamesEBriggs) March 31, 2017
HHGregg has been in business for 62 years. The company was founded by Henry Harold Gregg and his wife, Fansy. The once successful company took on other big box retailers, like Best Buy, and continued to turn a profit. The inability to adequately adapt to internet shopping in our increasing e-commerce society reportedly played a significant role in the demise of the long-standing company.
When foot traffic at HHGregg began to drop, the electronics and furniture store did not offer popular online shopping features, such as free shipping, quickly enough and only revamped its business model after weak holiday shopping sales in 2015.
Riesbeck was hired as the CEO of the retailer in February 2016 – replacing Dennis May after he resigned. The new company head admitted the nearly constant changes in technology caused a significant disruption on how HHGregg had always done business.
“One thing HHGregg used to make their money on was those big-box TVs people had to have delivered. And that’s how HHGregg was built through the years. Once it went to flat panels, and all of a sudden people realized they could put them in the backseat of their car, delivery is not that important anymore,” Reisbeck said.
In an effort to increase sales, Riesbeck moved HHGregg away from its focus on electronics and into the “Fine Lines” brand of products – an upscale store-within-a-store concept. The line did offer some encouraging growth for the company, but it was not enough to compensate for the still plunging electronics sales. The once profitable retailer lost money for the past 24 months, and once again had an abysmal holiday shopping season in 2016.
“I would say, we’re not unique in retail,” Reisbeck said last year when giving a brutally honest assessment of the state of the company.
Do you think more retailers will be forced to close stores like HHGregg, Sears, and Kmart as online shopping becomes even more popular?
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