HHGregg is reportedly preparing to file for bankruptcy.
The Indianapolis-based retailer, which has sold appliances, electronics and furniture since 1955, has been struggling with severe sales declines. HHGregg shares were down more than 30% in early trading Feb. 24, forging fresh 52-week lows on the report.
Earlier this month, HHGregg said it hired advisors Stifel Nicolaus and Miller Buckfire to help it manage a difficult retail environment after it saw disappointing holiday sales. The company, which has more than 3,700 full-time employees, is still trying to find an out-of-court solution to help it avoid filing Chapter 11, one of Bloomberg’s sources said.
HHGregg has 226 U.S. locations and sells appliances like washers and dryers, dishwashers, refrigerators and cooking ranges, as well as consumer electronics like televisions, computers and Blu-Ray players. It also sells furniture like mattresses, sofas and dining sets. Retailers like HHGregg, that rely heavily on sales from physical locations, have been trying to adapt to consumer shopping trends, which are increasingly favoring online channels. (See also, Retail Empire Strikes Back with Omnichannel Strategies)
So far this year, retailers that have filed for bankruptcy include The Limited Stores, a women’s apparel retailer that closed 250 locations, and Wet Seal, another mall-based women’s retail chain. (See also, Retails Face Rising Shutdowns as Losses Mount)
HHGregg reported third quarter results on Jan. 26. Net sales declined 23.7 percent to $453 million from the same quarter a year prior. Same-store sales fell 22.2 percent. Adjusted net loss was $1.70 per share, extended from a net loss of $0.15 per share a year prior.
“During the quarter, we were challenged by the competitive pressures in the market, specifically in consumer electronics as it is a larger mix of our business during the holidays,” HHGregg CEO Robert Riesbeck said in a statement.
HGG began trading on the New York Stock Exchange in July 2007 with an IPO that set its share price at $13.72. The stock is now trading in a 52-week range of $0.24 to $2.72.