hhgregg is reportedly preparing to file for bankruptcy.
Unnamed sources familiar with the matter told the local Indianapolis Business Journal that the Chapter 11 filing may come as soon as March, although the company is still seeing an out-of-court solution to avoid bankruptcy.
Bloomberg also cited sources who said a filing is imminent.
The retailer, which reported a 24 percent decline in sales during the October-December holiday period, announced last week that it had hired an investment banking firm with experience in pre-packaged Chapter 11 bankruptcies as an advisor.
See: hhgregg In Play
President/CEO Robert Riesbeck said the advisors were brought in help “explore potential strategic transactions,” but stressed that the company remains committed to its current strategy of cutting costs and deemphasizing CE in favor of appliances and furniture.
Riesbeck, formerly chief financial officer, succeeded CEO Dennis May last year as losses mounted and market share declines widened. The downturn came as plans for an aggressive national build-out, devised under the late founding-family scion Jerry Throgmartin, came undone by the recession, rapid expansion, e-commerce competition and disruptions within its core TV category.
To date the retailer has seen 13 successive quarterly losses, including a $58 million net loss for its fiscal third quarter; a revolving door of senior managers; and now faces delisting from the New York Stock Exchange (NYSE).
The company also announced pink slips for 100 workers this month, including 70 headquarters staff, the Journal said, and cited a
investment report that hhgregg’s major suppliers may demand shortened payment terms this summer — assuming it avoids bankruptcy.
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