After a series of setbacks, including poor holiday sales and delisting by the New York Stock Exchange, hhgregg has filed Chapter 11 bankruptcy protection and announced that it has found a buyer for the 132-store business that would emerge from the legal process.
The retailer did not reveal the name of the buyer but, instead, revealed that it has signed a term sheet with an anonymous party to purchase the assets of the company. The purchase would allow the company to exit Chapter 11 debt free with significant improvement in liquidity, hhgregg stated. The company added that it expects a quick and smooth Chapter 11 process with emergence in about 60 days.
The retailer filed the Chapter 11 petition in the United States Bankruptcy Court for the Southern District of Indiana. Its 132 store locations will operate in the ordinary course of business throughout the restructuring process, hhgregg maintained, with the 88 stores identified on March 3 for closure operating until mid-April. The company also announced the closure of three distribution/delivery centers.
“We’ve given it a valiant effort over the past 12 months,” said Robert Riesbeck, hhgregg’s president and CEO. “We have conducted an extensive review of alternatives and believe pursuing a restructuring through Chapter 11 is the best path forward to ensure hhgregg’s long-term success. We have streamlined our store footprint and remain fully committed to the 132 remaining stores, and the associates supporting those locations. We have solidified our senior management team and everyone is dedicated to restructuring our business model for future profitability and growth. Through these strategic steps, we plan to come out of this debt free and more agile as we serve our valued customers and vendor partners, and continue to be a dominant force in appliances, electronics and home furnishings.”
