Hhgregg Has Filed for Chapter 11 Bankruptcy

by San Antonio Attorney

Electronics and appliance retailer Hhgregg along with its Gregg Appliances entity sought for bankruptcy protection due to declining sales for the past four years.

Hhgregg claimed debts and assets of as much as $50,000 in its Chapter 11 petition in a bankruptcy court in Indiana, and disclosed that it entered a term sheet with an unspecified party to buy its assets.

Gregg Appliances claimed debts and assets between $100 million and $500 million in its bankruptcy filing.

Hhgregg, which is headquartered in Indianapolis, Indiana, said it is hoping to exit from bankruptcy within two months.

Chief Executive Robert Riesbeck said they aim to become debt free through the bankruptcy process.

The 132 stores of the company would continue to operate without interruption during the restructuring.  The company has said before that it would be closing 88 stores.

Hhgregg retained Stifel Financial Corp to give advice on financial and strategic transactions.

The retailer suffered poor sales during the holiday, according to its recent report.  Sales at locations that have been around for a year or longer decreased 22.2% throughout the latest fiscal quarter.

The closure of stores should be done by April.  Around 1,500 employees are expected to lose their jobs, which would become the second round of massive layoffs at HHGregg.

For many years, Hhgregg has fought to get share of the market against giant stores and online retailers.

To get noticed, the electronics chain has made efforts to transform itself as a top-line appliance center by setting up its Fine Lines offering.  Hhgregg is ranked as the top 7 largest appliance seller in the United States following Wal-Mart, Sears, Best Buy, Sears Hometown, Home Depot and Lowe’s, according to trade magazine Twice.

HHGregg is one of the many retailers reinventing themselves to keep up with the online market.  Bloomberg reported that Target Corp. and Best Buy Co.  are planning to offer more products online and reduces prices as well.

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