Another retailer bites the dust.
The management of hhgregg said on Friday afternoon that the company was closing all 220 of its stores and going out of business entirely, having failed to find a buyer for the furniture, electronics and appliance retailer in bankruptcy court. The liquidation ends a 62-year run for the Indiana-based chain.
The company, which competed with Best Buy (BBY, -0.31%), among others, sought Chapter 11 protection in Indianapolis bankruptcy court in early March, when CEO Bob Riesbeck said the company hoped to shed its debt and emerge “more agile.”
Alas it was not to be, despite discussions with dozens of prospective acquirers.
“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,” Riesbeck said in a statement on Friday afternoon.
The going-out-of-business sales will start on Saturday at hhgregg stores. The company said it did not expect there to be money enough left from the liquidation after paying off creditors to give any to shareholders. hhgregg has negotiated a consulting agreement with liquidation firms Tiger Capital Group and Great American Group to sell the merchandise at its 132 remaining stores (it had begun closing 88 after its bankruptcy filing last month) and to sell off items like furnishings and fixtures in those stores.
It has been a painful decline for the company: in May 2010, shares of hhgregg traded at $30.01, its all-time closing high, giving it a market cap of $834.6 million three years after going public. But unlike Best Buy, it was unable to fend off the likes of Amazon.com (AMZN, -0.94%) in the sale of electronics, and its plans to become a national, rather than local, chain came at a time when electronics prices were falling and competition growing more intense.
The hhgregg liquidation comes on the heel of a particularly difficult time for retailers: chains like Payless ShoeSource, The Sports Authority, The Limited, American Apparel, Aéropostale, Wet Seal, BCBG and PacSun are among the retailers to have filed for bankruptcy protection in the last two years, with some liquidating altogether. Others, like Bebe are simply closing their stores and becoming internet-only retailers.
by Phil Wahba
