Attention, hhgregg landlords (and their furniture store tenants): you're getting a very different retailer than the one you originally signed.
Faced with declining comps in consumer electronics (who isn't?), the retailer is shifting its focus to appliances and home furnishings, executives said in its third quarter conference call.
“The store of the future encompasses appliances as more than 50% of our mix,” Dennis May said. “But when you look at the company's share, the number one retailer in this marketplace even in the markets we're in, they're double our share. We have great opportunity.”
The numbers don't lie. The third quarter saw the chain post a comp-store sales decrease of 11.2 percent – but positive comp of 1.5 percent for the appliance category, and a whopping 36.1 percent comp increase for the very new home products sector. Consumer electronics (televisions, audio, accessories and the like) saw a 19.7 percent drop.
Computer and wireless (largely computers, mobile phones and tablets) posted a 24.5 percent decline, driven in part by a decline in laptop sales and deflation in tablet prices, the chain said.
To some degree, lack of innovation fed the drop in television sales, though new technologies such as 4K, OLED and more could cause sales to pick up. But consumer electronics, it seems, has become a seasonal business (running from Black Friday to SuperBowl Sunday), and already is comprising a smaller portion of hhgregg's business, declining from 48% in the year-ago quarter to 43% this year. Instead, plans call for bolstering appliances, furniture (at several price points) and fitness equipment.
In addition, the March opening of the chain's one new store for fiscal 2014 has been delayed, with the unit to open in 2015.
“Home products and furniture are continuing to grow. The assortment is going to continue to be interesting to us. Currently we have one supplier in furniture, we're going to five. We're going to cover far more price points,” May said.
And that will mean more competition for a whole different sector.
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