In an effort to stay afloat, HHGregg, is planning on closing 88 of its weakest stores as part of an effort to stay afloat. The appliance and electronics retailer has been struggling for some time now.
Exiting several markets:
Stores in 15 states and three distribution centers will close, according to the Indianapolis-based company’s announcement on Thursday. HHGregg currently has about 5,000 employees, but the closings, which are due to be completed by mid-April, will result in 1,500 jobs loss.
Robert Riesbeck, HHGregg CEO, gave a statement saying: “We are strategically exiting markets and stores that are not financially profitable for us. 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.”
This move will result in closing 40% of HHGregg’s stores, which comes as an increasingly desperate attempt to right the company’s course, just three days after the company was delisted from the New York Stock Exchange for failing to meet the minimum listing requirement.
The layoffs resulting of this announcement aren’t the first. HHGregg had a round of layoffs just last month, 100 employees were effected, including 70 workers at its 96th Street headquarters.
Last week, Bloomberg reported HHGregg is preparing to file for bankruptcy as soon as this month.
Effects of shifting shopping preferences:
HHGregg is in a fierce competition against traditional big-box stores such as Best Buy, and it has also lost precious market share to online retailers. The company has tried to unsuccessfully reinvent itself in recent months as a high-end appliance store.
According to the consumer electronics trade publication Twice, HHGregg is the seventh-largest appliance retailer in the U.S. behind Lowe’s, Home Depot, Sears, Best Buy, Sears Hometown and Wal-Mart.
The company has been consistently losing money for the past two years, it has also reported a dreary holiday shopping season. During the most recent fiscal quarter, which included the holidays, sales at stores that have been opened for at least a year, have declined by 22.2%.
After the coming closure, the number of HHGregg stores will fall to 132 stores, but according to Riesbeck, the chain “will continue to be a dominant force in appliances, electronics and home furnishings.”
“We have determined that the economics of the affected locations will not allow us to achieve our overall goal of becoming a profitable company again. After scrutinizing our real estate portfolio, we have identified a number of underperforming stores, as well as store locations that are no longer strong shopping destinations due to changes in the local retail shopping landscape,” he added.