HHGregg Files for Bankruptcy, Finds a Buyer
HHGregg, along with its Gregg Appliances Inc. unit, announced this week that it has filed for Chapter 11 bankruptcy. The electronics and appliance retailer made this announcement just a few days after shuttering 88 stores in 15 states. HHGregg has signed a term sheet with an anonymous party to buy the retailer's assets. The selling of assets will allow the company to exit Chapter 11 "debt free with significant improvement in liquidity for the future stability of the business." Robert J. Riesbeck, HHGregg's president and CEO, said that he expects the Chapter 11 process to be smooth and quick. The company expects to emerge from the restructuring in about 60 days.
Total Retail’s Take: HHGregg, which has lost money for the past two years, recently reported poor holiday sales. Sales at stores that have been opened for at least a year declined 22.2 percent during the most recent fiscal quarter. HHGregg has struggled to compete for market share against traditional big-box stores like Best Buy and Home Depot. The retailer has tried to reinvent itself as a high-end appliance store with its Fine Lines division. Riesbeck believes that selling the company’s assets is its best path forward. HHGregg listed assets and liabilities of up to $50,000 in its Chapter 11 filing in the U.S. bankruptcy court for the Southern District of Indiana, and Gregg Appliances listed assets and liabilities in the range of $100 million to $500 million in a separate filing.