hhgregg Details Deep Cuts
hhgregg shares have been down around 20 percent in pre-market trading on the Bloomberg report.
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIndianapolis-based hhgregg Inc. says it plans to close 88 stores and three distribution centers as part of an ongoing effort to return to profitability. The retailer says the move will affect around 1,500 employees and final closings are expected to be complete by mid-April. The New York Stock Exchange began the delisting process for hhgregg this week. Following a third quarter loss of more than $58 million, hhgregg launched a partnership with two financial advisory firms to explore "strategic alternatives."
Chief Executive Officer Robert Riesbeck says the stores that will be closed were not profitable, and the closings will allow the company to focus on markets that are "important to our customers, vendor partners and communities." The closings, none of which will be in Indiana, will leave 132 stores in the hhgregg portfolio.
"The management team has worked tirelessly over the past year to return hhgregg to profitability. 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."
hhgregg says the inventory from the stores that are closing will be sold in the coming weeks. The company says the three distribution centers, which are located in Maryland, Florida and Pennsylvania, will continue to support customer orders until everything has been delivered. Riesbeck expressed his thanks to the effected workers in a news release and said "I understand this is not an easy process to go through; our history has shown that our team members will meet this challenge head-on and continue to support our customers and each other through the closing process."
Of the 88 stores being cut, there are 15 each in Virginia, Florida and Pennsylvania, 11 are in Maryland, six are in Illinois, four each are in Ohio, Georgia and North Carolina, three each are in New Jersey, Delaware, Louisiana, two are in Alabama and there is one store in each state of Tennessee, Missouri and West Virginia.