Appliance and electronics retail giant HHGregg hasn’t had the easiest first few months in 2017, and it’s not looking too good in recent news.
We reported on the retailer’s potential bankruptcy in February, and then HHGregg announced the closing of three distribution facilities along with 88 stores. All of this seems to not be enough to pull it out of its seemingly downward spiral.
On Thursday (March 16), HHGregg shared its decision to end a non-binding term sheet agreement with an unnamed organization to buy out all assets via a Chapter 11 reorganization under the United States Bankruptcy Code. The mystery bidder, some of whom believe is HHGregg’s ad agency Zimmerman Advertising, weren’t able to reach an agreement on specific terms. Back on March 6, HHGregg filed for Chapter 11 bankruptcy, and without a buyer in line, it has no choice but to move forward with the filing.
In the meantime, HHGregg has interim approval for the company’s $80 million debtor-in-possession loan facility to help continue run business as usual through the sale and bankruptcy filing process.
HHGregg’s CEO, Robert J. Riesbeck, commented in a public statement on the future of the company in terms of potential future buyouts post-bankruptcy filing. He said, “We have received strong interest from third parties interested in buying some or all of the company’s assets. We and our advisors continue to work with potential acquirors to help them understand our business model for future growth and our value proposition.”
What does this mean for the future of appliance specific stores like HHGregg?
With the popularity and convenience of online shopping, it’s possible that eCommerce sites like Amazon will continue their upward trajectory. The ease that eCommerce provides to consumers is something that not many brick-and-mortar stores can compete with as we move to a more on-demand economy. In the case of appliance shopping, we may see standalone stores like HHGregg and others continue to consolidate locations in an effort to avoid bankruptcy.