Scott Goss

The News Journal

Electronics and appliance retailer Hhgregg will close all three of its Delaware locations by next month – part of a major restructuring meant to return the struggling chain to profitability.

The Illinois-based company announced Thursday that it would be closing the Delaware stores and 85 other locations, resulting in a complete withdraw from the Mid-Atlantic market. The list of closures also includes 14 stores in Virginia, 14 in Pennsylvania, 11 in Maryland and three in New Jersey, along with sites in 10 other states. A trio of distribution centers in Maryland, Pennsylvania and Florida also will be shuttered.

Nationwide, the closings will result in 1,500 job losses or about 40 percent of the company's 3,700 employees.

A total of more than 60 employees at Hhgregg's three Delaware locations in Brandywine Hundred, Christiana and Dover are expected to lose their jobs as a result of the closings, a company spokeswoman said.

"We do not know the exact closing date for each store location at this time," communications manager Chantal Kowalksi said. "The stores will remain open until current inventory is sold, which we expect will be complete within the next 5-6 weeks."

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In a statement posted on the company's website, Hhgregg said final closings are slated for mid-April. The closures will leave the chain with 132 locations in a handful of states.

Chief Executive Officer Robert Riesbeck said the closures are targeting unprofitable stores in an effort to refocus the chain on its core markets.

"This is a proactive decision to streamline our store footprint in the markets where we have been, and will continue to be, important to our customers, vendor partners and communities," he said. "We have determined that the economics of the affected locations will not allow us to achieve our overall goal of becoming a profitable company again."

Hhgregg's announcement comes on the heels of reports the 61-year-old chain was considering filing for bankruptcy following two years of sagging sales and a disappointing performance from last year's holiday shopping season. In January, the company reported a 24-percent drop in fourth-quarter sales to $453 million compared with the same three-month period a year earlier.

The chain said last month that it had hired a financial adviser and investment banker to help it pursue a range of deals meant to restore the company to profitability.

The company's stock jumped as much as 10 cents in over-the-counter markets Thursday to 22 cents per share, after having been delisted from the New York Stock Exchange earlier this week.

Hhgregg's pending store closures are just the latest in a wave of shutdowns and layoffs sweeping the retail industry over the past year, as customers continue transitioning to online retailers, discount brands or bigger chains able to offer deeper discounts.

Sears Holdings announced in January that it would be closing 108 Kmart stores and 42 Sears locations nationwide, while Macy's announced plans to close 68 stores across the country. None of those announcements impacted the chains' Delaware locations.

The Limited and American Apparel, meanwhile, each announced they would be shutter all of their respective locations, having already departed the Delaware market months earlier.

Sports Authority closed its lone Delaware location in last June, and Eastern Mountain Sports shuttered one of its two stores in the state over the Memorial Day weekend.

Contact business reporter Scott Goss at (302) 324-2281, sgoss@delawareonline.com or on Twitter @ScottGossDel.