The bankruptcy bug has claimed its next victim. One month after filing for Chapter 11 bankruptcy, hhgregg is expected to close all 220 of its stores by the end of May.
The retailer began liquidating its assets on April 8, one day after failing to find a buyer by its bankruptcy deadline. The store closings are expected to result in 5,000 layoffs across the U.S.
“While we had discussions with more than 50 private equity firms, strategic buyers and other investors, unfortunately, we were unsuccessful in our plan to secure a viable buyer of the business on a going-concern basis within the expedited timeline set by our creditors,” said Bob Riesbeck, CEO of hhgregg in a statement.
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Prior to the deadline, an unnamed bidder initially emerged that would have allowed the retailer to exit the process, but the deal fell through upon a disagreement over the plan to pay creditors.
hhgregg has signed a consulting agreement with liquidators Tiger Capital Group and Great American Group to sell its merchandise, furniture, fixtures and equipment across all of its stores and 14 distribution centers. The bankruptcy is expected to wipe out the value of hhgregg’s common stock.
Riesbeck attempted to divert hhgregg’s core focus from electronics to its high-end appliances branch, Fine Lines, as the business continued to struggle. But the shift couldn’t salvage the brand’s plummeting electronics sales.
Unfortunately for hhgregg, this story has become all too familiar in retail, with companies failing to adapt quickly enough to changes in consumer shopping habits. The lost sales and store traffic reflects the overstored, often-overstocked nature of brick-and-mortar operations that are now costing many retailers dearly.
