A Q&A with the Man Behind the hhgregg Comeback Story
It’s been quite the interesting few months for the hhgregg brand. Back in April, Dealerscope reported on the company’s decision to close its doors after 60-plus years in operation. At the time, it was considered to be the end of an era for a retailer that had built up quite the reputation only to see it wash away.
Then, in the blink of an eye, the hhgregg brand popped back up near the end of the summer. It started with a slow but effective social media campaign that helped to drum up all kinds of excitement among already nostalgic-minded consumers. Then came a working website with daily deals, and all of a sudden hhgregg was back.
The resurgence of hhgregg is a credit to Valor LLC, an investor group that focuses its efforts mainly on the consumer electronics channel. Michael Eisner, the principal of the company, has led the charge and is responsible for Valor’s successful bid for the hhgregg assets during a mid-summer auction, beating out companies like Sears and Best Buy. With the big win, Valor got access to the brand’s customer lists and troves of other data, all of which it plans to use to put hhgregg firmly back on the map in the consumer electronics retail industry.
Eisner was gracious enough, amid the hassle and bustle of the Black Friday weekend (and, you know, rebuilding hhgregg), to talk to us about Valor, the hhgregg comeback, and more for the upcoming Dealerscope Podcast. Below is a portion of our conversation.
Dealerscope: Michael, before we jump into it, I want to say thank you for taking the time to talk with us. I know you guys are a little busy with what you've got going on. Before we talk about hhgregg and everything that's going on there, I know you actually come from a different company that invested in hhgregg. Tell me a little bit about Valor LLC and what it is you guys do there.
Michael Eisner: Sure. So, Valor LLC is what you would call a holding company for different companies that we own and different operations that we have. Our main business is in the CE industry, and what we do there is we have full scale distribution and retail, all related to CE. That's our core business. And that was one of the main reasons that we jumped at the opportunity to take advantage of hhgregg. It's part of the puzzle for us to get deeper into this space.
That's awesome and is actually a nice lead in to what I was going to ask next, which is, what did spark your interest in pursuing the hhgregg brand and assets in that auction over the summer?
Well first of all, whenever you hear about companies that are having financial issues and that have such a stellar reputation and been in business for so long—you look at hhgregg's history, they’ve been in business for over 60 years—you don't have many companies that have that type of reputation and history. That was one of, and to me probably the main, most attractive pieces of hhgregg, and that's why we pursued it so heavily.
As you know, it was in an auction and we outbid some pretty impressive players from Sears to Best Buy. It was really important for us to get into the appliance market and being able to have that hhgregg brand behind us, we felt was very important for our strategy and really a great opportunity that we couldn't pass up.
How crucial was it for you guys to get your site up and running and kind of this grand reopening ahead of Black Friday?
Black Friday and Cyber Monday—everybody in the consumer electronics industry that's what we wait for the whole year. So it was definitely important to have it up. There's still going to be a lot of changes, a lot of modifications, new bells and whistles coming to the website, it’s definitely a work in progress. I think anybody in this industry is constantly evolving and constantly keeping on top of the new trends and things that are out there and seeing how quickly we can implement it into our into our business and push the needle forward. So it was very important to have the product up. We definitely know that there's a lot more work ahead of us, but we absolutely wanted to have that product up to take advantage obviously of the timing of the year, but also to enhance that interaction that hhgregg has with the customers and kind of pick up where they left off and just try to keep that momentum going.
Part of the IP that we purchased included data from over 25 million customers, and surprisingly enough we're getting a lot of phone calls and a lot of traffic to the website, and there's still a lot of brand recognition left in hhgregg. So we plan to take that and run with it and take it to the next level.
You mention part of the assets that you guys were able to secure through the auction. Can you talk at all about what was included other than the rights to the name?
We've got a lot of data. We've got a lot of data in the sense of how often they bought, their purchase history, sticker prices, location. So there's a lot of data in relation to the 25 million customers that they had in their database. So we're able really to you know dissect that and jump into that and see you know areas that we should be focusing on and product lines that we should be focusing on. It was a lot of data and we're still digesting it. Obviously a lot to go through but it's definitely a very good base for us to start and get some you know real insight into the you know HHGregg brand and service I think logically the starting point should be but you know obviously that's going to evolve.
How is the hhgregg experience going to be different from what consumers might have experienced just a few months ago?
Well, definitely from a few months ago, just the fact that you can't walk into a location I'm sure that's a major difference for a customer. But we're in the process of, you know. we have the website up, we have an online presence right now. We wanted to get that up as quickly as possible just to have that interaction with the customer to try to keep that momentum going as fast as we can.
Are there any plans for a physical footprint?
Physical retail is definitely part of our plan. We want to open up a handful of stores next year and over the next, I would say, three to five years to definitely get that number up. We're looking at different opportunities, partnering with different brands and different retail outfits. There's a lot on the table right now, a lot to digest and to figure out. Surprisingly—actually not surprisingly, it's just amazing actually how many companies and people out there still want to associate with the brand and have a part of that. I mean, we're getting calls from—I don't want to expose any names but—big box stores have an interest in our brand and want to work with us. So, you know, we have a lot of opportunities in front of us and a lot of different directions that we can go, but brick and mortar retail is definitely going to be a big part of our strategy going forward.
Not asking you to give away anything, but when you're talking about stores and the physical footprint, is the plan to get back to those same locations where hhgregg was or is the actual store going to look a little bit different?
I definitely think we're going to have a different concept, a different approach to how we're going to do things going forward than what hhgregg had in the past. But at the core it's still going to be hhgregg. We're still going to take that brand value and that brand equity and really be relatable to the customers that we had before and new customers in the future. And the locations, you know, we're still putting that all together. Like I said we have a lot of data, things that we're trying to sift through and figure out, and get all of our as they like to say, ducks in a row before we make those decisions.
Look out for our full interview with Michael when the Dealerscope Podcast drops in the next few weeks. Are you a retailer who's interested in sharing your story with us? Reach out to Editorial Director Rob Stott at email@example.com.