From Home Furnishing Business
HHGregg Files for Chapter 11 Bankruptcy Protection
Furniture, electronics and appliance retailer HHGregg (OTC: HGGG), which last week announced it is closing 88 stores and eliminating about 1,500 jobs, has filed for Chapter 11 bankruptcy protection.
The bankruptcy filing, which had been rumored for weeks, will allow the company “to restructure its balance sheet and position itself for future success,” the retailer said in a statement about the filing.
“We’ve given it a valiant effort over the past 12 months,” said Robert J. Riesbeck, president and CEO. “We have conducted an extensive review of alternatives and believe pursuing a restructuring through Chapter 11 is the best path forward to ensure HHGregg’s long-term success. We are thankful for the continued support of our dedicated employees, valued customers, vendors and business partners as we navigate this process, and look forward to becoming a stronger company in the coming months.”
Riesbeck said he expects the Indianapolis-based company to emerge from bankruptcy protection in about 60 days, noting that the company already has agreed to sell its assets to an undisclosed party and has obtained $80 million in debtor-in-possession financing.
He said the new financing, combined with the acquiring party’s investment and the company’s cash from operations, is expected to provide sufficient liquidity during the Chapter 11 case to support its continuing normal business operations and minimize disruption.
“We have streamlined our store footprint and remain fully committed to the 132 remaining stores, and the associates supporting those locations. We have solidified our senior management team and everyone is dedicated to restructuring our business model for future profitability and growth,” added Riesbeck. “Through these strategic steps, we plan to come out of this debt free and more agile as we serve our valued customers and vendor partners, and continue to be a dominant force in appliances, electronics and home furnishings.”