Electronics retailer H.H. Gregg has opened its first physical store since shuttering its entire footprint during its bankruptcy two years ago.
The store, at just under 2,000 square feet, is more of an electronics boutique. It opened this past Thursday at the Cedar Grove Shopping Center, in Somerset, New Jersey, according to a company press release emailed to Retail Dive.
New Jersey-based holding company Valor Group, LLC outbid the likes of Sears and Best Buy to acquire the 64-year-old brand. Within months, the H.H. Gregg website was back in business and Valor promised that brick and mortar would also return, the company noted.
Even as H.H. Gregg's new owner touted the freshly opened store and others to come as essential to its future, the announcement also chronicled the retailer's checkered history in over-expanding that channel.
Valor painted a picture of a company seduced by the cheap real estate options that popped up during the Great Recession. The retailer snapped up leases, in some cases for space vacated by Circuit City after its bankruptcy, taking a 2008 footprint of 91 stores in nine states to a peak of 228 stores in 20 states in 2015, according to the release.
"We definitely see the value in a brick & mortar location," Valor Group, LLC., Director of Retail Operations Eli Sapharti, said in a statement. "And we are also intimately aware that physical locations and overly rapid expansion is death to any company aiming for long years of success."
It's not just fewer stores, but smaller ones, the company also said, noting that, while that's a major change for the former big boxer, "its size in fact makes sense given the new state of retail and the ongoing 'Retail Apocalypse,'" per the release. The strategy fulfills the need consumers have for handling and testing out electronics in person, and will help spur online sales, the company also said, noting that "60% of males age 18-34 — the prime customers for electronics — prefer to try out gadgets in real-life before purchasing. And 55% of shoppers across all ages also go to a physical store before ultimately buying online."
Combining that market evidence with its own analysis of 25 million H.H. Gregg customer records, the company said it concluded that "this is the most effective way to keep providing consumers with the same service and trusted name that H.H. Gregg built since its founding in 1955," according to Sapharti.