Midwest electronics retailer leases space in Hampton Roads

HHGregg Inc., a big-box electronics and appliances retailer, has leased two spaces vacated by out-of-business companies to open its first stores in Hampton Roads.

HHGregg, based in Indianapolis, signed leases for the 37,500-square-foot former Linens 'n Things store on Virginia Beach Boulevard in Virginia Beach and for the former Circuit City electronics store on Jefferson Avenue in Newport News, according to Thalhimer, the real estate brokerage that handled the lease. The stores are expected to open in the spring.

This week, HHGregg is opening stores in Midlothian and Henrico - its first in the state. In business since 1955, the company has 124 locations, mostly in the Southeast and Midwest.

From the Richmond area, Hampton Roads seemed a natural next step for HHGregg's expansion, said Jeff Pearson, its vice president of marketing. While many retailers have slowed growth or shut stores in the past year, the difficult economy has provided opportunities for HHGregg, he said.

The closure of major chains has left large retail spaces available and landlords willing to negotiate on rent, Pearson said.

"It gives us the chance to expand and be in the key locations in particular markets," he said.

Recent layoffs also have created a pool of available workers with experience in retail that HHGregg can pull from, he said. HHGregg typically hires 40 to 50 employees per store.

The retailer's willingness and financial ability to grab those opportunities is unusual in this economic climate, said Dave Smith, Thalhimer's first vice president.

"There's relatively little activity out there," he said.

HHGregg's niche is in larger electronics and major appliances, Smith said. The store also sells mattresses.

With most major retailers pricing TV sets and refrigerators at "about the same price," HHGregg aims to set itself apart with service, Pearson said. "We think we're a retailer that's needed in the market."

HHGregg hasn't been immune to the economic downturn and pullback in consumer spending. In its most recent quarter, which ended Sept. 30, the company reported a 9.4 percent decline in comparable-store sales. Sales in comparable stores, or those open at least 12 months, provide the best measure of year-over-year performance.

Overall sales for HHGregg were up 3.7 percent, to $332.2 million, from the same quarter in 2008. The company also said its profit climbed 46 percent to $4.9 billion, mostly as a result of the uptick in sales and a "modest decrease in operating expenses."

Carolyn Shapiro, (757) 446-2270, carolyn.shapiro@pilotonline.com