H.H. Gregg Expanding Into Atlanta Market In 2003
By Alan Wolf -- TWICE, 4/15/2002
Indianapolis, Ind.— Midwest CE and majap powerhouse H.H. Gregg says it plans to expand into the Atlanta market next year with 11 stores and a central distribution center to support them.
The Atlanta locations represent Gregg's first foray into Georgia, and are a continuation of an aggressive expansion strategy that will have catapulted its store count from 18 units five years ago to 60 stores in 2003.
The chain, which operates in Indiana, Ohio, Kentucky and Tennessee, is also adding five new stores this year in existing markets.
Dennis May, the merchant's chief operating officer and executive VP, explained that Atlanta is a "healthy, growing market that is not currently being served with our level of service. We think we'll do well there."
Tweeter subsidiary HiFi Buys, which operates 15 A/V-only specialty stores in the Atlanta area, is currently that market's largest high-end regional player. Roberds, the Ohio-based furniture, appliance and CE chain, had briefly established a beachhead in Atlanta before going bust in 2000.
Gregg's Atlanta units will average 30,000 square feet, which is typical for the chain, but will reflect ongoing improvements in store format. Most of the stores will be new constructions, with the remainder retrofits of existing buildings. Opening dates have not been finalized, but will be heralded by a local marketing campaign that will encompass TV, radio, newspaper and outdoor ads.
May noted that the privately held dealer will not assume any debt to pay for the market expansion. "The company is very well capitalized," he said.
Gregg isn't the only chain with the wherewithal for extra-regional expansion. Just prior to the Atlanta announcement, Ultimate Electronics filed a registration statement with the Securities and Exchange Commission to sell 2.75 million shares, valued at approximately $80 million. According to the filing, the Colorado-based CE specialty chain plans to earmark about $35 million for debt repayment and will use the balance to build new stores and complete a new management information system.
A member of the NATM buying organization, H.H. Gregg is a service-oriented specialist that focuses on better-featured major appliances and consumer electronics, particularly home theater products. It sold $271 million in CE products and $169 million in majaps in 2000, respectively placing 49th and 8th on the TWICE Top 100 CE and Major Appliance Retail Registries.
