Rough News For hhgregg
hhgregg shares have been down around 20 percent in pre-market trading on the Bloomberg report.
Indianapolis-based hhgregg Inc. (NYSE: HGG) has announced restructuring plans that have led to 100 employees losing their jobs. In a separate announcement, the company says it could face suspension or delisting from the New York Stock Exchange.
The company says the restructuring of its field and corporate work force will help save $15 million annually. Chief Executive Officer Robert Riesbeck says the decision was a difficult one.
"While decisions like this are never easy, we are taking the necessary steps to preserve and grow our business during the continued challenging retail environment," said Riesbeck. "The organizational changes implemented [Friday] will streamline our company infrastructure and allow us to reallocate resources to align more closely with our company goals. We are dedicated to enhancing our customers’ experience both in-store and online, and to delivering superior value for our customers and stakeholders. Moving forward, we are prioritizing the growth of our home furnishings, Fine Lines, e-Commerce and commercial segments, while refining our focus on our consumer electronics and appliance businesses."
The NYSE notified earlier this week hhgregg that it had not maintained an average closing price of more than $1.00 per share over a period of 30 consecutive trading days. The company says it intends to notify the NYSE within 10 days of its intent to comply with the requirement.
"The Company has six months from the date of the NYSE Letter to regain compliance by having a closing stock price of at least $1.00 on the last trading day of any calendar month during the six month period and an average closing stock price of at least $1.00 over the 30 trading-day period end on the last trading day of that same month, or by meeting both of those conditions as of the last trading day of the six month period," the company said in a news release.
Additionally, hhgregg says it is also out of compliance by having an average global market capitalization of less than $50 million over a period of 30 consecutive trading days while its stockholders’ equity was less than $50 million at the same time. The company will have 45 days to submit a plan to the NYSE Listing Operations Committee and, if accepted, will have 18 months to regain compliance.
If the company fails to regain compliance related to either of the two requirements, it will be subject to suspension and delisting from the NYSE. hhgregg says the notification from the NYSE does not affect is business operations.