Hhgregg announced its latest efforts in a turnaround plan, which includes the closure of three distribution facilities and 88 store locations. The closures will allow the company to reallocate resources and move toward bringing the chain back to profitability.
“We are strategically exiting markets and stores that are not financially profitable for us,” said Robert J. Riesbeck, Hhgregg's president and CEO. “This is a proactive decision to streamline our store footprint in the markets where we have been, and will continue to be, important to our customers, vendor partners and communities. We feel strongly that the markets we will remain in are the right ones for our customers and our business model. Our team is dedicated to moving forward and being a profitable 132-store, multiregional chain where we will continue to be a dominant force in appliances, electronics and home furnishings.”
Hhgregg began turnaround efforts about a year ago, after the resignation of former CEO Dennis May. Now, after scrutinizing its real estate portfolio, the company has identified underperforming locations due to local economics and changing retail shopping landscapes.
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For the stores that are closing, doors will officially be shut by mid-April after final sales. The closings will mean the elimination of 1,500 jobs.
The distribution centers which will close are located in Brandywine, Maryland, Miami and Philadelphia. Stores that are closing are primarily located in Florida, Illinois, Maryland, Ohio, Pennsylvania and Virginia, as well in some of the surrounding states.
Last month, Hhgregg announced a partnership with Stifel Financial Corp. to pursue a range of financial transactions to improve the company's liquidity and reduce costs. At the time, Riesbeck said that investments were in the works to shift the brand's focus to appliances and furniture, veering away from its electronics merchandise, which has shown declining sales over the past few years.
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Just weeks before the announcement, Hhgregg had received a warning from the NYSE that its global market capitalization over a 30-day trading period had dropped below the listing criteria and that the retailer needed to promise to take actions to get back into conformity within 18 months.