hhgregg may be heading toward a restructuring or sale.
According to an 8-K filing with the Securities & Exchange Commission (SEC), the struggling appliance and CE chain has retained an investment banking firm, Stifel Financial Corp., to help it “pursue a range of potential strategic and financial transactions.”
The retailer will be working with Stifel subsidiaries Stifel, Nicolaus & Co. — which provides capital restructuring and private placement services — and Miller Buckfire, a corporate restructuring specialist whose fortes include private-equity loans and pre-packaged Chapter 11 bankruptcies.
While the latter has participated in a number of high-profile Chapter 11 cases, including Kmart’s and Polaroid’s, sources familiar with the matter told Bloomberg that Miller Buckfire was brought in part to address hhgregg’s debt load, which now stands at $30 million, and to advise it on a possible turnaround.
In a statement, hhgregg president/CEO Robert Riesbeck said, “We believe it is an appropriate time to 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.
The move follows years of successive quarterly losses and a revolving door of senior managers, after the recession and disruptions in the TV market brought its aggressive national expansion plans to a halt.
Shares of hhgregg shot up more than 20 percent, to 52 cents a share, in after-hours trading following the announcement.
No timetable has been set for the completion of its new advisors' review process, the retailer said, nor will it necessarily lead to "
a transaction or other strategic alternative of any kind."