Electronics retailer hhgregg has filed for bankruptcy protection and signed a term sheet with an anonymous party to acquire the company's assets.
The firm filed for a Chapter 11 reorganisation in the US bankruptcy court for the Southern District of Indiana.
The restructuring is intended to facilitate the company’s long-term, strategic goals of bolstering profitability.
hhgregg president and CEO Robert J Riesbeck said: “We’ve given it a valiant effort over the past 12 months.
“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.
"We are thankful for the continued support of our dedicated employees, valued customers, vendors and business partners as we navigate this process, and look forward to becoming a stronger company in the coming months.”
The purchase of the assets by an anonymous party is intended to allow the retailer to exit Chapter 11 debt-free with an improvement in liquidity.
The retailer expects an emergence from Chapter 11 in approximately 60 days.
Riesbeck continued: “We have streamlined our store footprint and remain fully committed to the 132 remaining stores, and the associates supporting those locations.
"We have solidified our senior management team and everyone is dedicated to restructuring our business model for future profitability and growth.
“Through these strategic steps, we plan to come out of this debt free and more agile as we serve our valued customers and vendor partners, and continue to be a dominant force in appliances, electronics and home furnishings.”
hhgregg's 132 store locations will operate throughout the restructuring process.
Last week, the retailer announced its plan to close 88 of its stores.
Morgan, Lewis and Bockius and Ice Miller are serving as hhgregg’s legal advisors in the restructuring while Stifel, Nicolaus & Company, Miller Buckfire & Co., and Berkeley Research Group are serving as financial and restructuring advisors.