INDIANAPOLIS — The going-out-of-business sales have begun at HHGregg.
The bankrupt retailer is planning to begin liquidating its assets Saturday after failing to find a buyer by its Friday deadline. The company expects to close all of its 220 stores by the end of May, resulting in about 5,000 layoffs across the U.S.
HHGregg CEO Bob Riesbeck in a statement said the company has "continued to fight for the future" since March 6 when it filed for Chapter 11 bankruptcy protection.
"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," Riesbeck said.
A company spokeswoman said Riesbeck was not available for an interview.
The liquidation process means HHGregg customers only have a few weeks left to use gift cards and return previously purchased items. Customers who want to make returns could end up being disappointed. The company, citing its bankruptcy process, is limiting returns on items bought before March 6 to $2,850 — a fraction of the cost of many high-ticket appliances and televisions.
The liquidation ends a 62-year run for HHGregg, which is headquartered on 96th Street. The company was founded by Henry Harold Gregg and his wife, Fansy.
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HHGregg built a reputation as a regional electronics retailer, taking on companies such as Best Buy. But, like other big-box stores, HHGregg struggled to adapt to the e-commerce age. The store lost foot traffic and was slow to add features that online shoppers like, such as free shipping.
Riesbeck, who became CEO in February 2016 after Dennis May resigned, acknowledged he faced a difficult task. He described in an August interview how constantly changing technology has disrupted the company's business model.
"One thing HHGregg used to make their money on was those big-box TVs people had to have delivered," Riesbeck said. "And that's how HHGregg was built through the years. Once it went to flat panels, and all of a sudden people realized they could put them in the backseat of their car, delivery's not that important anymore."
Riesbeck attempted to divert HHGregg's focus from electronics to Fine Lines, an upscale store-within-a-store that sells appliances. HHGregg has become the seventh-largest appliance retailer in the U.S. behind Lowe's, Home Depot, Sears, Best Buy, Sears Hometown and Wal-Mart, according to the consumer electronics trade publication Twice.
Although the Fine Lines brand showed encouraging growth, it was not enough to make up for plummeting electronics sales. HHGregg lost money in each of the past two years. The company suffered through a brutal holiday shopping season last year, which accelerated its demise.
HHGregg this year has taken a series of drastic steps to stay afloat. The company in February said it would lay off 100 people, including 70 workers at its headquarters, and followed that up March 2 with an announcement that it would close 88 stores in 15 states. Those store closings, which have not yet been completed, would have brought the company down to 132 locations. HHGregg has a total of 220 stores in 19 states.
HHGregg warned a week ago that the end could be near. The company disclosed in a March 31 Securities and Exchange Commission filing that it would begin liquidating unless it found a buyer by Friday.
HHGregg has signed a consulting agreement with 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.
As Riesbeck was working to reinvent HHGregg last year, he offered a blunt assessment of the company that could be considered its epitaph.
"I would say," he told IndyStar, "we're not unique in retail."
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