In order to reach more customers and meet their demand during the holiday season, hhgregg Inc.(HGG - Analyst Report) announced the opening of numerous new stores in several parts of the country.
Indianapolis-based hhgregg added two new stores in Ford City, Chicago and in North Riverside of Chicagoland. These were in addition to the 14 new stores added in this area in September 2011. The world’s leading electronic and appliance chain will face competition in Chicago from Sears, Best Buy Company Inc. (BBY - Analyst Report), Lowe’s and Home Depot (HD - Analyst Report), along with online rivals such as amazon.com.
The company also added a new store in St. Clairsville, OH., increasing the total number of stores in the region to 32.
Another new outlet was opened this week in South Florida that took the South Florida store count up to 11 and the total Florida store count to 34. hhgregg made its debut in South Florida in July 2011, with the grand opening of nine local stores and one in Jensen Beach. In South Florida, hhgregg's competitors include: Best Buy , Wal-Mart Stores (WMT - Analyst Report), Sears, BrandsMart USA and others who sell consumer electronics and appliances.
hhgregg has decided to match its peers like Kohl’s Corporation (KSS - Analyst Report) and Target Corporation (TGT - Analyst Report) and is going to keep its stores open during the midnight on ‘Black Friday’. This move is to the contrary of an earlier decision of opening the stores at 4:00 AM.
The retail giant is offering the local residents of these areas a wide selection of televisions, appliances and electronics at a low price.
hhgregg stores sell a selection of brand name appliances, flat panel televisions, premium video products, digital cameras, audio products and other portable electronics and accessories.
The management is on an expansion spree and it is of the opinion that through opening more and more stores the company will gain instant market penetration and concentration.
Additionally, hhgregg plans to make shopping easier by launching a new e-commerce platform and transforming its Web site, hhgregg.com, where buyers can compare products, watch videos and learn how to operate high-end merchandise.
Though hhgregg’s premium-priced products have the risk of losing its market share to its peers, who have almost same price listing, its aggressive marketing strategy and the remarkable top-line results in the second-quarter ended September 30, 2011, prompt us to maintain a Zacks #2 Rank, which implies a short term ‘Buy’ rating on the stock.