hhgregg Decks Up for Holiday Season - Analyst Blog
November 16 2011 - 4:45AM
Zacks
In order to reach more customers
and meet their demand during the holiday season, hhgregg
Inc.(HGG) 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), Lowe’s and
Home Depot (HD), 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), Sears, BrandsMart USA and others who sell consumer
electronics and appliances.
hhgregg has decided to match its
peers like Kohl’s Corporation (KSS) and
Target Corporation (TGT) 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.
BEST BUY (BBY): Free Stock Analysis Report
HOME DEPOT (HD): Free Stock Analysis Report
HHGREGG INC (HGG): Free Stock Analysis Report
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TARGET CORP (TGT): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis Report
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