Unable to find a buyer by today’s deadline, hhgregg will begin liquidating its assets this weekend and expects to shut its doors for good by June, the Indianapolis Business Journal reported.
In an email to employees obtained by the publication, CEO Bob Riesbeck said discussions were held with more than 50 private equity firms, strategic buyers and other investors.
“Unfortunately,” he wrote, “we were not successful in our plan to secure a viable buyer of the business on a going-concern basis within the expedited timeline set by our creditors.”
Some 5,000 employees will lose their jobs as a consequence.
Fire sales will be conducted by Tiger Capital and Great American, and the 62-year-old appliance, CE and furniture chain will likely be out of business by June, joining a long line of electronics chains that dreamed big but ultimately overreached.
The company filed for Chapter 11 protection last month with a prearranged bankruptcy sale on the table following 13 consecutive quarterly losses. But the deal fell through when the stalking horse bidder, believed to be an affiliate of its ad agency, Zimmerman Advertising, reportedly backed out after a $6 million payout was blocked by Haier.
The retailer was founded on April 15, 1955, by Henry Harold Gregg and his wife Fansy in an 800-square-foot appliance showroom and office in Indianapolis.
Its undoing can be traced to the untimely death of Henry’s grandson Jerry Throgmartin, a beloved leader who launched an aggressive multiregional expansion in pursuit of national status.
Fueled by a public offering and chief investor Freeman Spogli & Co., a private equity firm, the Indianapolis business grew from 18 to 220 stores across 19 states over the course of two decades.
But the plan was upended by an unfortunate confluence of events, including Throgmartin’s passing; e-commerce competition; the recession; and industrywide disruptions within the company’s bread-and-butter TV business.
The multiregional buildout stretched the company’s management resources under Throgmartin’s lieutenant, Dennis May, which led to a succession of leadership teams and unsuccessful forays into furniture, exercise equipment and other ancillary categories.
The end of the road comes as industry icons RadioShack and Sears face uncertain futures. But in death hhgregg may give life to
other CE and appliance retailers
as it relinquishes over $1 billion of market share.
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