HGG is growing sales both same store and overall. The reason that their margins are low is that they have had to discount to counter Amazon who is selling consumer electronics at breakeven. When Amazon grows the top line but makes no money the analysts love them and upgrade the stock. When HGG discounts to counter Amazon and ends up taking share from Best Buy and Amazon (they grew same store sales faster than the market grew)the analysts cut their rating on HGG. HGG has little debt, makes money and has a lower cost structure (smaller stores and lower cost leases than best buy) than Best Buy and they have a better business model than Amazon (Amazon can't sell appliances, doesn't have commissioned sales people who can sell the top end merchandise and will soon have to pay sales tax which will eliminate their advantage).
Those who say that Best Buy and HGG have become the show rooms for Amazon are stupid. Best Buy still sells 10 times the electronics that Amazon does. Best Buy is just run by idiots. Instead of demanding exclusive SKUs from manufacturors which unique feature sets that online sellers can't whore out and sell at cost, Best Buy continues to bend over and take it up the chocolate hole. HGG has a much better model with comissioned sales people who drive much higher average tickets than the dopes at Best Buy. If best buy and HGG go out of business due to Amazon, the show rooms will be gone and the consumer electronic companies will be screwed because they will have no way to demonstrate their products to consumers. The consumer electronics companies know this and HGG and best buy should be using this to enforece minimum pricing and to get exclusive skus. To a large extent HGG is doing a good job at this compared to Best Buy.
The other problem for Best buy is that they built huge stores to show case DVDs and Video games and these are being replaced by digital download. However, HGG has built out smaller stores and has gotten lower rents so they are not saddled with unproductive floor space and their overall cost structure is much lower than Best Buy.
All this adds up to good times ahead for HGG - just you watch
HGG and best buy should be using this to enforece minimum pricing? I gather you do not know that it is illegal to fix prices? Have you ever heard of the word "anti-trust" in economics 101 or did you sleep through your class during college?
Also your argument re no show rooms does not make much sense. The fact is too many people go to BBY and HGG to see and touch the products, and come home to buy them from Amazon.com at much lower price. If BBY and HGG are wiped out (akin to Blockbuster), Amazon can set up its own (true) show rooms in major cities --- which of course is a little bit too extreme a scenario. So there will be brick stores like BBY and HGG, but they will shrink as a long term trend.
You are the one who fell asleep in class. Minimum advertised pricing is a common practice in retail (that's why all the add to car to see price, also when retailers offer a gift card with purchase its to try get around minimu advertised pricing rules). Sounds like you need to do some reading monkey boy (below is the Supreme Court case that will get you started)
On June 28, 2007, the Supreme Court overruled the Dr. Miles Supreme court ruling from 1911. The 2007 ruling held that vertical price restraints as Minimum Advertised Pricing are not per se unlawful but, rather, must be judged under the "rule of reason." Leegin Creative Leather Products, Inc. v. PSKS, Inc., Slip Op. No. 06–480 (Decided June 28, 2007). This marked a dramatic shift on how attorneys and enforcement agencies address the legality of contractual minimum prices, and essentially allowed the reestablishment of resale price maintenance in the United States in most (but not all) commercial situations.
To address your other assertion, Amazon cannot open up showrooms because they will have to charge sales tax in any state where they do so. Moreover, this added expense could make Amazon uncompetative on price with HGG and Best Buy.
The point is simple, Amazon has not invented some new model that makes bricks retail obsolete. Amazon, unlike bricks retailers does not make any profit on its sales. Amazon also, for the time being, does not charge sales tax giving it a 5-9% price advantage. On the other hand, HGG has commissioned sales people and good sales people will beat an Amazon's computer algorithms everytime on upsell and cross sell of products especially when the sales people have the benefit of real products on hand. Moreover, people, both young and old, love to shop at real stores and this is not changing- parking lots were as packed this holiday as ever and finding any place to park was often the problem.
You're not looking at hgg very accurately. They have stores averaging around 30,000 sf and now do under $13MM a store. $400 a sf in sales just won't cut it the low margin in their categories. And you identified their biggest issue - commissioned sales people. This is an outdated model. You have salespeople motivated to do things that work in the favor of themselves directly and HH Gregg indirectly. The very fact that you say they sell a much better miz of product is the problem. This model will fail, as have all commissioned formats, because of poor customer service.
I like the fact that HGG pays their staff via commission. Having spent 20 years in sales, I have found that commission is the biggest motivator to sell more. There is nothing worse than a talented sales person being given a large salary...boring...yawn, yawn, no challenge.