(INDY STAR) -- Officials with electronics and appliance retailer HHGregg announced Tuesday that the struggling business has filed for Chapter 11 bankruptcy.
News of the filing comes just days after the company announced the shuttering of 88 stores in 15 states, a major move made to give the retailer a better chance at survival.
Indianapolis-based HHGregg has signed a term sheet with an anonymous party to purchase its assets, the news release says. The selling of assets will allow the company to exit Chapter 11 "debt free with significant improvement in liquidity for the future stability of the business."
“We’ve given it a valiant effort over the past 12 months,” Robert J. Riesbeck, HHGregg's president and CEO, said in a statement. “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 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.”
According to a news release petitions were filed in the U.S. Bankruptcy Court for the Southern District of Indiana. Officials say the restructuring is being done to help the company reach its long-term goals of boosting profitability and supporting its associates and vendors.
Riesbeck said he expects the Chapter 11 process to be smooth and quick. Officials anticipate an emergence in approximately 60 days.
“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,” Riesbeck said in a statement. “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.”
HHGregg, which has lost money for the past two years, recently reported poor holiday sales. Sales at stores that have been opened for at least a year declined by 22.2 percent during the most recent fiscal quarter, which included the holidays.
HHGregg will close stores in 15 states: Alabama, Delaware, Florida, Georgia, Illinois, Louisiana, Maryland, Missouri, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia and West Virginia. The company is also closing distribution centers in Brandywine, Md., Miami and Philadelphia.
HHGregg's 132 stores will continue with their usual day-to-day business. The 88 stores impacted by the company's Friday announcement will operate under the new parameters previously outlined.