Hhgregg Appliances Inc. will live on as an online-only brand starting next week.
Holding company Valor Group LLC won a bankruptcy auction for hhgregg’s intellectual property in June for $400,000, a deal that included hhgregg’s e-commerce site as well as its customer files and trademarks. Valor beat the next-highest bid of $350,000 submitted by Sears Holdings Corp. (No. 19). A Sears spokesman declined to comment on the retailer’s interest in hhgregg.
Michael Eisner, who in a phone interview described himself as a “jack of all trades” for Valor Group, says hhgregg will launch as a fully shoppable site in the near future, although he declines to give a date.
“That’s a little bit up in the air,” he says. “Sooner rather than later is the best answer I can give you. We want to make sure we get everything right. We only get one opportunity at a relaunch. We want to do it the right way.”
The appliances and electronics retailer, which was ranked No. 233 in the Internet Retailer 2017 Top 500, features a countdown clock on its website advertising its grand reopening, although the retailer doesn’t specify a date anywhere on its website and the countdown clock changed from four days to five days when Internet Retailer viewed the site on Friday.
Hhgregg filed for Chapter 11 bankruptcy in March and liquidated its online and store inventory a month later. In 2016, the retailer generated $130 million in online sales, a 23.8% increase from $105 million in 2015, according to Top500Guide.com. Hhgregg returning as an online-only brand mirrors the comeback strategy of fellow bankrupt retail chain The Limited. The Limited relaunched its flagship website on Friday, more than 10 months after shuttering it and filing for bankruptcy. Private equity firm Sycamore Partners had acquired The Limited’s intellectual property at a bankruptcy auction in February for $26.75 million.
Since August, New-Jersey-based Valor Group has operated hhgregg.com as a daily deals site. Hhgregg for decades was family-owned and based in Indiana. Eisner says the retailer is fulfilling its online orders through a third-party logistics provider, declining to name it. The retailer intends to open its own fulfillment centers as well as bricks-and-mortar stores, he says.
“We already have the [fulfillment center] location picked out,” he says. “Things are moving quite fast. The short-term plan is to push e-commerce as well as retail locations. We’re looking to open two or three stores and then grow that number.” Eisner says the retailer hopes to have stores open by the end of this year.
Web traffic data from digital analytics firm SimilarWeb shows that traffic to hhgregg.com hit 216,934 visitors in September, a fraction of the more than 2 million visitors it had in March when it filed for bankruptcy. That 216,934 figure represents a month-over-month decrease of 43.1% from 381,211 visitors in August.
The retailer’s new president, Moses Bijou, will oversee the site relaunch and customer service staff. Bijou could not be reached for comment.
The consumer electronics market has plenty of players, including heavyweights such as Amazon.com Inc. (No. 1) and Best Buy Co. Inc. (No. 10), but Eisner says he and his team see value in hhgregg’s customer list and the brand’s heritage.
“The intellectual property is very strong. The name is very powerful. The biggest challenge with any company that went through [bankruptcy] is rebuilding trust with the customer,” he says. “Hhgregg had a stellar reputation. [Its downfall] was a financial issue.”
The relaunched hhgregg plans to sell appliances on its website, as it did previously, and the Valor Group is in touch with major consumer brand manufacturers, such as General Electric and Whirlpool Corp., Eisner says.
Customer service will differentiate hhgregg from Amazon, Best Buy and other big retailers, Eisner says. The new hhgregg will hire experts for each brand that the retailer will sell, and will have experts to work with customers online and in the retailer’s stores. “One of the pieces that I feel that [Amazon is] missing and that hhgregg could provide is those specialists—people who are really knowledgeable about the product,” he says. “We’re going to have the specialists train the associates.”
Promoting the relaunch will involve marketing to hhgregg customers via email and social media, but Eisner did not have dates or details about campaigns. The retailer’s new social push began in August when the retailer announced on Facebook and Twitter that it had new owners.
We are excited to announce the https://t.co/cuY9zSop5G is now under new ownership!
Looking forward to working with you again soon! :)
— hhgregg (@hhgregg) August 17, 2017
Shoppers may have to wait until the site is fully operational to obtain customer service.
Multiple calls to the retailer’s customer service line on Friday resulted in no contact with a customer service representative. Instead, callers were sent to an automated line informing them that they can email hhgregg if they’re interested in making a purchase. The customer service voicemail box is full, and when the system tells a caller to hold for an operator, it disconnects soon after.Favorite