The 61-year-old retailer of appliances and electronics is preparing to file for bankruptcy as it grapples with an ongoing slump in sales, according to people familiar with the matter.
Indianapolis-based HHGregg Inc. is turning to investment banks “to pursue a range of potential strategic and financial transactions” as the struggling appliances and electronics retailer battles sinking sales.
Robert Riesbeck, appointed to the top job last year, says growth opportunities in appliances and furniture are sufficient to offset declines in the company's battered consumer electronics product line.
The New York Stock Exchange has notified HHGregg that the company’s stock price needs rise above avoid a delisting. Its market cap also needs a boost.
In a statement, CEO Robert Riesbeck said: "While decisions like this are never easy, we are taking the necessary steps to preserve and grow our business during the continued challenging retail environment.”
The retailer took a whopping loss of $58.3 million in the quarter, more than double the loss of $26.9 million it took in the third quarter of the previous year.
HHGregg released preliminary sales results for its latest quarter Monday after the market closed. Shares fell 24 percent in after-hours trading, to $1 each, after closing at $1.31.
Three major Indianapolis-based retailers struggling with declining sales replaced their CEOs this year as they tried to improve company financials.
The Indianapolis-based appliance and electronics retailer suffered another money-losing quarter, though its strategy to focus more on appliances is making headway.
Keith Zimmerman had been with the struggling Indianapolis-based chain since December 2014. A senior executive said HHGregg has begun the search for a new chief merchandising officer who will "move a little faster" and bring greater creativity to the job.
Just two months into the job, HHGregg CEO Robert Riesbeck believes the struggling retailer “still has long-term viability.” He aims to boost results in part by doubling-down on appliances—a strategy that includes opening more locations of the super-premium Fine Lines chain.
Dennis May, who left HHGregg Inc. in February after nearly seven years as CEO of the retail chain, has a taken a new job at a health care company that has plans for regional growth.
The electronics and appliance retailer also announced more personnel moves, including the appointment of a new chief financial officer.
The Indianapolis-based retailer promoted Chris Sutton to senior vice president of marketing, following the departure last month of his predecessor. It also hired two merchandising execs.
HHGregg Inc. failed to turn a profit for the 11th straight quarter as sales at the Indianapolis-based retail chain continued to fall, but the company did see some improvement in key financial categories.
Indianapolis-based HHGregg officially named Robert Riesbeck president and CEO on Monday. The executive joined the company in 2014 as chief financial officer.