In news that will come as a surprise to just about no one, hhgregg has filed for Chapter 11 bankruptcy. The appliance, electronics, and furniture retailer had previously announced it was, closing 40% of its stores, but it apparently concluded that the best strategy was a quick Chapter 11 and sale.
The retailer already has an agreement with a buyer to purchase its assets while leaving the debt behind, but the buyer is, according to the Indianapolis Star, anonymous.
“We are thankful for the continued support of our dedicated employees, valued customers, vendors and business partners as we navigate this process, and look forward to becoming a stronger company in the coming months,” President and CEO Robert J. Riesbeck said in a statement, noting that the chain would remain committed to the 60% of its stores that are staying open.
The chain’s hometown paper, the Star, reports that hhgregg has been losing money for the last two years, and sales are down 22%. It stock price fell so low that it was kicked off the New York Stock exchange.
Closing 88 stores in 15 states and leaving some markets entirely is the company’s last bid for survival. Will it stay competitive as new retailers like JCPenney re-enter the appliance market? Will the new owner insist that the company use standard capitalization? We’ll find out in the coming year, since the company plans to emerge from the bankruptcy in just 60 days.