hhgregg sees Richmond market as key to its growth

INDIANAPOLIS -- Consumer electronics and appliance retailer hhgregg sees Richmond and other markets in Virginia as key to its growth strategy.

"Richmond is an important market for us as we expand into the mid-Atlantic," said Jeff Pearson, the chain's vice president of marketing.

The Indianapolis-based retailer will open two stores -- in former Circuit City locations at Short Pump Town Center in Henrico County and near Chesterfield Towne Center in Chesterfield County -- by Thanksgiving, he confirmed yesterday.

The chain hopes to have a third store -- Pearson isn't saying where, but sources say it will be at The Shops at White Oak Village in eastern Henrico -- open in November. Pearson said details are still being worked out for the third site.

There could be more hhgregg stores next year and beyond. Pearson declined to say how many.

"We are looking at many other locations there," he said. "We are looking at all retail opportunities, and there is an abundance of real estate out there. We are excited about the opportunity to compete for business. We want people to come in and experience hhgregg and let us earn their business."

The local stores would be hhgregg's first locations in Virginia, and the 11th state for the fast-growing retailer.

In addition to opening stores in the Richmond area, hhgregg plans to add six locations in October in Tampa, Fla., and two stores in Memphis, Tenn. -- all markets where now-defunct Circuit City Stores Inc. formerly had a strong presence. Henrico-based Circuit City closed its last stores in March.

Next year, hhgregg plans to open most of its 40 to 45 new stores in mid-Atlantic markets, including elsewhere in Virginia and in Washington, Baltimore and Philadelphia.

"If you look at our expansion, Richmond becomes important for us," he said.

"We are in the Carolinas, and we love the Carolinas. We think consumers in Virginia are very similar and want the same style of service," Pearson said, adding that what the chain learns about the Richmond consumer will help hhgregg when it opens stores in the Washington and Baltimore markets next year.

A key difference between hhgregg and other electronics retailers is that hhgregg still pays store employees a commission on sales, an arrangement Circuit City eliminated in early 2003 and one that Best Buy got rid of in the late 1980s.

Also, TVs and appliances are big parts of hhgregg's business. Appliance sales, for instance, generated 31 percent of total sales last fiscal year. The retailer also sells other electronics, such as digital cameras and computers, and small appliances and other items including Serta mattresses and luggage.

But hhgregg doesn't sell music CDs, movie DVDs and computer software or games, and it doesn't install car stereos.

"We sell the big stuff -- televisions and appliances," Pearson said.

Contact Gregory J. Gilligan at (804) 649-6379 or