hhgregg Eyes $54M In Stock Offering
By Alan Wolf -- TWICE, 7/16/2009
Indianapolis - hhgregg is looking to raise upward of $54 million through a public stock offering to help fuel the chain's aggressive expansion plans.
The company, which plans to enter the Mid-Atlantic States next year with as many as 45 new stores, is selling 3 million shares of its common stock, which closed yesterday at $16.89 on the New York Stock exchange.
The offering, expected to raise between $46.7 million and $53.8 million, comes as the company's estimated first-quarter comps fell nearly 15 percent on weakness in the video and appliance categories.
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hhgregg To Enter Mid-Atlantic States |
In addition to the public offering, hhgregg will sell another 1 million shares at the public price to an investment fund controlled by Freeman Spogli & Co., a majority shareholder that acquired the retailer in 2005 and helped take it public two years later. The private investment firm currently holds 37.6 percent of hhgregg's outstanding common stock, although its position would be reduced to 36.3 percent following the public offering.
The chain has also increased its credit line, from $100 million, to $125 million, according to a filing with the Securities and Exchange Commission.
As part of the private placement with Freeman Spogli, hhgregg disclosed its preliminary results for its first fiscal quarter. Estimated net sales slipped 3.7 percent to $284.4 million for the three months, ended June 30, driven primarily by an estimated 14.7 percent decrease in comp-store sales, as video and appliance comps fell by 17 percent and 17.5 percent, respectively.
The comp-sales decline was offset by the opening of 15 stores since the year-ago period, the company said.
hhgregg will open two more stores today, in Asheville and Wilmington, N.C., bringing its store count to 113.
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OMG this almost made me spit my soda thru my nose. with major retailers like circuit city, tweeter and compusa buries, sears nearly there and the worst retail climate in years this company thinks massive expansion is a smart move? Anyone remember Ultimate Electronics?
Bradly - 2009-16-7 13:36:37 EDT
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