hhgregg has evolved from black-and-white to digital. The appliance and electronics retailer began as a small storefront selling washing machines, refrigerators, and black-and-white TVs. Today, the fast-growing company sells name-brand products at more than 225 stores in about 20 mostly southern states and online. Its offerings include TV and video products (LED TVs, Blu-ray disc players), home and car audio gear (CD players, home theater systems), appliances (refrigerators, washers and dryers), computers, gaming consoles, digital cameras, GPS navigators, and mattresses. Founded in 1955, hhgregg has been growing aggressively amid tough economic conditions and a bleak outlook for consumer electronics retailers.
hhgregg is working to expand its online operation. The appliances and electronics retailer offers shoppers the option of buying online and then picking up their purchase in the store or home delivery for online orders. Home appliances represent about 51% of sales.
hhgregg operates stores in Alabama, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Mississippi, Missouri, New Jersey, North Carolina, Ohio. Pennsylvania, South Carolina, Tennessee, Virginia, West Virginia, and Wisconsin. Florida, with 36 stores, is the retailer's largest market.
The retailer's revenue has been in decline since 2013 and in fiscal 2015 (ended March) it fell another 9% to $2.12 billion due to falling sales from declines in both average selling price and number of items sold. Net income has been in free fall since 2012 and actually crossed into the red in 2015 when it plummeted another $132.9 million to $132.7 million. Decreased revenue lead to the need to impair some stores as assets, causing charges, higher taxes, and, of course, the net loss.
Sensing opportunity, hhgregg adopted an accelerated growth strategy in the aftermath of the demise its rival Circuit City in 2009. Over the next four years the chain added about 120 stores, many in new markets. The retail chain looked to new locations to fuel sales and income growth. But while sales nearly doubled, a closer look at hhgregg's performance revealed that sales at stores open more than one year (a key indicator of a retailer's overall health) were declining. Like market leader Best Buy, hhgregg suffers from "showrooming," when shoppers view a product in its stores and then order it online for less from other retailers including Amazon.com. The fickle US economy and stubborn high unemployment continue to hold down demand for big ticket items, especially TVs and appliances.
In response to declining same-store sales, hhgregg set three key initiative for fiscal 2015: re-allocating marketing spending to focus on digital rather than print, reducing general and administrative costs, and improving revenue. The retailer is using several methods to accomplish the latter, including expanded credit offerings like lease-to-own and secondary financing, better integrating its online and in-store experiences, and offering more home delivery and set-up services partly by focusing more on large items that require such services. hhgregg has also changed its store opening strategy to target areas with good economic growth and high household incomes where new home building and remodeling numbers are above average.
In 2014 hhgregg looked to make up for the drop in TV sales, which had dragged down revenue, by selling more appliances as the housing market in the US improved. Appliances now lead all categories, accounting for more than 50% of sales.