HHGregg to liquidate, close all stores

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Re: HHGregg looking at strategic alternatives

Post by cathandler »

wnetmacman wrote:So 40% of the chain is closing:

HHGregg to close 88 stores and 3 DCs

Not the bankruptcy that we've been discussing, but change is afoot.
Is there a recent example of a radical pruning of store count that allowed a retailer to survive? I can't think of any right off the top of my head. I still think they will ultimately have to liquidate. What purpose does HHGregg serve in this day and age?
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HHGregg Closing 88 Stores

Post by mjhale »

HHGregg closing 88 stores, 2 in Alabama: Complete list of locations going out of business

http://www.al.com/news/index.ssf/2017/0 ... _2_in.html
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Re: HHGregg Closing 88 Stores

Post by storewanderer »

Let's face it, this is a tough business. This company made it longer than one would have expected. Anyone who has been in one of their stores, this is not a surprise... it is a surprise they made it longer than The Good Guys... that is about the only surprise.
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Re: HHGregg Closing 88 Stores

Post by cathandler »

storewanderer wrote:Let's face it, this is a tough business. This company made it longer than one would have expected. Anyone who has been in one of their stores, this is not a surprise... it is a surprise they made it longer than The Good Guys... that is about the only surprise.
The Good Guys! in its prime was a pretty darn good home electronics store (as was Lechmere before Monkey Wards ran it into the ground.)
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Re: HHGregg Closing 88 Stores

Post by buckguy »

That they're exiting the DC area which has had a relatively strong economy speaks to a basic problem with their business mode--they can't really find a place where they can compete in a relatively new market even when the fundamentals seem strong. Simply put, they may be able to survive in in some of their legacy markets, but they probably can't expand.

The DIY stores seem to have taken over much of the market for run of the mill appliances in DC and some high end stuff in DC and elsewhere, while independent retailers stay alive working with contractors and decorators with niche items like apartment-sized appliances and the more exotic imports and high end models. That doesn't leave much for traditional retailers. The electronics end of their business is low margin and competes with the internet as well as more established specialty retailers like best Buy that have enough problems of their own.
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Re: HHGregg looking at strategic alternatives

Post by mbz321 »

cathandler wrote:
wnetmacman wrote:So 40% of the chain is closing:

HHGregg to close 88 stores and 3 DCs

Not the bankruptcy that we've been discussing, but change is afoot.
Is there a recent example of a radical pruning of store count that allowed a retailer to survive? I can't think of any right off the top of my head. I still think they will ultimately have to liquidate. What purpose does HHGregg serve in this day and age?

It seems they are pulling out entirely of where they tried to expand in the late 2000's, the Northeast specifically. That expansion was a huge and stupid mistake...I guess they thought they could capture some of Circuit City's former customers, but it was kind of too late at that point, and their stores were run/merchandised quite differently. Maybe they are still strong in the Midwest, as those stores seem to have been 'saved' for now. But given there are still rumors for bankruptcy, I don't see them surviving a whole lot longer. I read in some article that they were seventh in terms of retailers and large appliance sales, even below Walmart (which doesn't even really sell large appliances, so that about says it all).
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Re: HHGregg looking at strategic alternatives

Post by wnetmacman »

In an effort to keep from doubling topics, I have moved the posts from "HHGregg closing 88 stores" to this topic. The old topic will be closed; let's try to keep all discussions on the store closings and such here.

Thanks!
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Re: HHGregg looking at strategic alternatives

Post by cathandler »

And here we are - hhgregg to file for bankruptcy
https://www.bloomberg.com/news/articles ... -next-week
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Re: HHGregg Closing 88 Stores

Post by architect »

buckguy wrote:That they're exiting the DC area which has had a relatively strong economy speaks to a basic problem with their business mode--they can't really find a place where they can compete in a relatively new market even when the fundamentals seem strong. Simply put, they may be able to survive in in some of their legacy markets, but they probably can't expand.

The DIY stores seem to have taken over much of the market for run of the mill appliances in DC and some high end stuff in DC and elsewhere, while independent retailers stay alive working with contractors and decorators with niche items like apartment-sized appliances and the more exotic imports and high end models. That doesn't leave much for traditional retailers. The electronics end of their business is low margin and competes with the internet as well as more established specialty retailers like best Buy that have enough problems of their own.
The biggest challenge in the electronics retail industry is that products have become increasingly more specialized and brand-driven. As a result, it is difficult to compete as a brick-and-mortar retailer if you are unable to carry the product selection which your customers expect. Arguably, this has been one of the keys to Best Buy's turnaround; by opening mini-shops for Apple, Samsung, Sony, etc. in their stores, they are able to better centralize the product offerings from these prominent brands and make the overall shopping experience much more customer-centric. Their recent changes to their price match policy have also helped. On the other hand, Target's electronics departments led their decline in store sales in their most recent financial results; this is likely due to the fact that their electronics departments have little identity and destination value. Unless if a potential customer is already shopping at Target, rarely will a they consider "maybe I should go check out Target for the most extensive selection of the latest tablets?" Their selection simply has too many holes. Similarly, HHGregg has not developed a reputation as a destination retailer. Rarely are they at the forefront of shoppers minds when they think of electronics retailers, and just based on a quick glance of their website, too many products are online-exclusives.

Similarly, the appliance market has become extensively competitive, and HHGregg has not done enough to differentiate themselves, either on the high or the low end.
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Re: HHGregg looking at strategic alternatives

Post by cathandler »

It's official - HHGregg has filed for bankruptcy. Note that this is a pre-packaged bankruptcy and that a buyer has been found for the company's assets and they plan to emerge within 60 days. This plan greatly simplifies the process of closing those 88 stores and distribution centers but I don't see how this addresses the company's underlying problems. Sales dropped 24% percent last year, to name but one glaring example.
https://www.yahoo.com/tech/electronics- ... nance.html
http://www.businesswire.com/news/home/2 ... 006468/en/
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