March 7 (UPI) -- Electronics and home goods retailer hhgregg announced it filed for Chapter 11 bankruptcy, less than one week after revealing plans to close 88 stores in 15 states.
Indianapolis-based hhgregg, a 61-year-old company, also announced in a news release Monday night it signed a term sheet with an anonymous party to purchase its assets. The company said the sale will allow the company to exit Chapter 11 "debt free with significant improvement in liquidity for the future stability of the business."
The bankruptcy petitions were filed in the U.S. Bankruptcy Court for the Southern District of Indiana.
"We've given it a valiant effort over the past 12 months," Robert J. Riesbeck, hhgregg's president and CEO, said in a statement. "We have conducted an extensive review of alternatives and believe pursuing a restructuring through Chapter 11 is the best path forward to ensure hhgregg's long-term success."
The company has obtained $80 million debtor-in-possession financing facility underwritten by Wells Fargo Bank, National Association and GACP Finance Co.
Hhgregg's remaining 132 stores will continue with their usual day-to-day business. In addition to the store closings, the company on Thursday announced it was closing distribution centers in Brandywine, Md., Miami and Philadelphia. In all, 1,500 jobs will be eliminated.
"We have streamlined our store footprint and remain fully committed to the 132 remaining stores and the associates supporting those locations," Riesbeck said in a statement. "We have solidified our senior management team and everyone is dedicated to restructuring our business model for future profitability and growth."
Sales at stores opened for at least a year declined 22 percent during the most recent fiscal quarter, which included the holidays, the company said in a financial filing on Jan. 26. Overall, sales declined 24 percent to $453 million.
The move comes after the New York Stock Exchange delisted the company for failing to meet the minimum trading requirement.