A local general contractor has found a saving grace in retrofitting defunct Circuit City stores.
Indianapolis-based electronics retailer hhgregg swooped in and took over a couple of empty Circuit City stores in 2009. Since then, they’ve been taking over vacant big-box spaces across the country and taking a local construction company along for the ride.
Midlothian-based EDC has finished 28 stores, has four under construction and is bidding on another six.
President Chris Johnson said that the relationship his firm has built with hhgregg has helped them survive lean times in the retail construction industry.
“We were aware they were in expansion mode, so we started chasing them again when we recognized the economy was starting to fail, especially in retail construction where most of our business lies,” Johnson said.
EDC first worked with hhgregg in 2002, when it was hired by a developer to construct a build-to-suit store for the retailer in Indiana. EDC typically pursues projects in the Eastern United States.
It wasn’t until 2009, as hhgregg embarked on its major push to expand and fill the void left by bankrupt Circuit City, that EDC worked with them again.
Johnson said his firm got a chance to bid on a store outside of Memphis after the company’s head of real estate development received three strong recommendations from mutual contacts within a 24-hour period. They won the bid and have been working closely with the company ever since.
“We proved ourselves there. We did a great job, and they were very pleased,” Johnson said.
EDC was next hired by hhgregg to do the two stores in Richmond, and since then the retailer has become one of the contractor’s biggest clients and a big part of the company’s revenue. EDC has completed stores in several states, including Maryland, Ohio, New Jersey and Pennsylvania. They’ve also done several more in Virginia.
Johnson said the construction budget for each project varies widely. For instance, he said the Chesterfield store was a $1.4 million job, while the Short Pump store only needed $700,000 worth of work.
All but one of the hhgregg projects have been conversions of existing stores, mostly ones previously occupied by Circuit City or Linens ‘n Things, Johnson said. The newly opened store in Chesapeake, Va., is the first newly constructed one EDC has built for the company.
EDC is busy doing work for other clients as well. EDC continues to do work for Westchester Commons, a retail development in Chesterfield, and is performing renovations to Willow Lawn mall, among other projects.
Meanwhile, work from hhgregg shoes no sign of slowing. Despite lowering its expected earnings for fiscal 2011, publicly-traded hhgregg is holding on to its plans to add up to 45 new stores in 2012.
A local general contractor has found a saving grace in retrofitting defunct Circuit City stores.
Indianapolis-based electronics retailer hhgregg swooped in and took over a couple of empty Circuit City stores in 2009. Since then, they’ve been taking over vacant big-box spaces across the country and taking a local construction company along for the ride.
Midlothian-based EDC has finished 28 stores, has four under construction and is bidding on another six.
President Chris Johnson said that the relationship his firm has built with hhgregg has helped them survive lean times in the retail construction industry.
“We were aware they were in expansion mode, so we started chasing them again when we recognized the economy was starting to fail, especially in retail construction where most of our business lies,” Johnson said.
EDC first worked with hhgregg in 2002, when it was hired by a developer to construct a build-to-suit store for the retailer in Indiana. EDC typically pursues projects in the Eastern United States.
It wasn’t until 2009, as hhgregg embarked on its major push to expand and fill the void left by bankrupt Circuit City, that EDC worked with them again.
Johnson said his firm got a chance to bid on a store outside of Memphis after the company’s head of real estate development received three strong recommendations from mutual contacts within a 24-hour period. They won the bid and have been working closely with the company ever since.
“We proved ourselves there. We did a great job, and they were very pleased,” Johnson said.
EDC was next hired by hhgregg to do the two stores in Richmond, and since then the retailer has become one of the contractor’s biggest clients and a big part of the company’s revenue. EDC has completed stores in several states, including Maryland, Ohio, New Jersey and Pennsylvania. They’ve also done several more in Virginia.
Johnson said the construction budget for each project varies widely. For instance, he said the Chesterfield store was a $1.4 million job, while the Short Pump store only needed $700,000 worth of work.
All but one of the hhgregg projects have been conversions of existing stores, mostly ones previously occupied by Circuit City or Linens ‘n Things, Johnson said. The newly opened store in Chesapeake, Va., is the first newly constructed one EDC has built for the company.
EDC is busy doing work for other clients as well. EDC continues to do work for Westchester Commons, a retail development in Chesterfield, and is performing renovations to Willow Lawn mall, among other projects.
Meanwhile, work from hhgregg shoes no sign of slowing. Despite lowering its expected earnings for fiscal 2011, publicly-traded hhgregg is holding on to its plans to add up to 45 new stores in 2012.
Tell them to stick around. They will probably get the job to unfit it.
I share Al’s concerns about HHGregg. He reminded me of Reality Check #29: Reality Check #29: “Customer Concentration is a lightning strike waiting to happen” Both your banker and your CPA/Auditor know customer concentration is a no-no. Concentration means you rely on a single large customer (or 2) for a big chunk of revenue. By some measures 10% dependence is a huge risk…right up there with flying a kite in a thunderstorm. Risk Mitigation Strategy: Carry marshmallows…OR…Avoid making long-term commitments tied to this key customer. Find ways to get what you need on downwardly-scalable agreeements, even if it costs you… Read more »
hhgregg is a horrible retailer. The Short Pump location is sparse and short on inventory, sales reps are pushy and ignorant, and certain items like cameras are not powered so you cannot test before buying. hhgregg is a Circuit City redux.