endemic to electronics B&M. If you think this resolves quickly and without consolidation within the industry you will disinherit the money you invest here. HGG is bleeding cash and searching for products to replace items in the severely margin compressed and volume starved video category (the bulk of what they sell). HT and HA have flipped in regard to percent of sales in the last two years. Trouble is HA doesn't garner enough sales to sustain SG&A. This company, long as it is in business grew to fast recently in part to capture low commercial lease rates, not for the right reasons in the past three years. They understood the economic difficulties would possibly result in lower margins but failed to grab the concept of internet piece (showrooming) that has given them so much grief. The new items are likely cell phone and home office related. Best buy has 5 cell carriers in the line up. HGG just one.
Better think this through a bit before throwing money at it. The road to profitability will be long and bumpy at best case.
The real problem is sales - you just cannot make it in the Electronics/Appliance business at $400 a sf. Even embattled Best Buy is right at $1000 a sf (40,000sf stores doing $40MM). Dog just don't hunt - even if you add a little Exercise Equipment (a real mistake) and more Furniture.
This is a company with current projected EPS of 93 cents after taking into consideration of all negative factors. Positive operating cash flow on annual basis which part of it are used on re-purchasing of its own stock at below book value price now (smart move to make it harder to short). Net tangible assets $348M comparing to market cap. of $245M. Huge short interests which will eventually be turned into purcahses, it is just a matter of when.