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HHGregg will fill some gaping holes in the local consumer electronics market

An HHGregg store is roughly the same size as a Circuit City. The 111-store company sells consumer electronics and major appliances.

HHGregg photo

An HHGregg store is roughly the same size as a Circuit City. The 111-store company sells consumer electronics and major appliances.

HHGregg Inc. will fill some of the gaping holes in the Tampa Bay consumer electronics market left by the disappearance of Circuit City, Sound Advice and Rex TV and Stereo.

An Indianapolis chain with 111 stores and national ambitions, HHGregg plans to have about a half-dozen outlets open in the area before the Christmas holidays.

While the retailer stocks a wide range of consumer electronics, about 85 percent of its business comes from major appliances and a 110-set selection of TVs. Same-day delivery is available from an outsourced delivery company outfitted in HHGregg uniforms.

Most significantly, it also boasts a commissioned sales force in a retail universe known for minimal service and cutthroat pricing. Ninety-five percent of its work force of 3,500 is full time.

"In this era of self- or limited-service, where many sales associates don't know anything, we've learned a well-educated consumer buys more and better products with help from professional salespeople," said Jerry Throgmartin, chairman and chief executive officer, who added that the prices are competitive with other stores'.

In electronics, HHGregg goes head to head with Best Buy, CompUSA, Sears and Wal-Mart. In major appliances, add Lowe's, Apsco, Famous Tate and Home Depot to their local competition.

The company, which grew from a family appliance store in 1955, has had solid growth. In the past decade, it has grown its store base by 18 percent annually into nine states. It has not closed any stores during the current economic slump going back at least three years.

While the company built a presence in Florida in the past two years that stretches from Jacksonville to Orlando and west to Lakeland, HHGregg never publicly put Tampa Bay on the list or said when until now.

For competitive reasons, it is not disclosing the exact local locations. But the poor economy and reeling competitors recently prompted the company to accelerate its growth plans over the next few years toward an ultimate goal of 400 stores.

Weakened competition is not the only reason for HHGregg's expansion. Around the country, the company has been filling empty holes in prime shopping centers with rent reductions of 10 percent or more and landlords picking up the conversion costs. At 30,000 square feet, the standard store is about the size of a Circuit City or Linens 'n Things. The company sees a glut of out-of-work sales talent.

In its fiscal year that ended March 31, revenues rose 11 percent to $1.4 billion and net income rose to $36 million, or $1.10 a share, up from $21 million, or $1.07 a share. Sales in stores open more than a year, however, dropped 8 percent.

"This is a window of opportunity so big you don't see that many of them in a lifetime," said Dennis May, chief operating officer, who in August becomes chief executive.

Mark Albright can be reached at [email protected] or (727) 893-8252.

HHGregg will fill some gaping holes in the local consumer electronics market 06/10/09 [Last modified: Thursday, June 11, 2009 10:57am]
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