P.C. Richard Joins hhgregg in Consumer Electronics Expansion

Last year's demise of Circuit City could be interpreted as evidence that the American landscape was over stored by consumer electronics retail locations and discount chains that sell the same goods. But some smaller outfits, and Best Buy (BBY), the biggest one of them all, are opening stores.

Farmingdale, N.Y.-based P.C. Richard & Son, a chain with 57 stores in the Northeast, plans further expansion into the region. The company is opening a total of seven to 10 new stores this year, while entering the Philadelphia market and will expand further into New England beyond its current one unit in Connecticut. "We're in a good position to take advantage of opportunities," said Gregg Richard, president of the retailer.

Hhgregg's (HGG) expansion plans are even more ambitious. The 127-store chain, based in Indianapolis, is opening between 20 and 22 units this year. The company's locations are in the Southeast and Midwest, and it recently entered Virginia.

Best Buy, of course, is much larger than either, operating about 900 of its namesake stores. And, though the retailer recently slowed down it's growth, the company still added 87 stores in the twelve months between last year's third quarter and the same period in 2008, during the recession.

All three chains are moving into former Circuit City locations. Some recent examples are: a Best Buy entering a shell in Michigan, P.C. Richard going into one as part of its New England expansion and hhgregg will occupy a former Circuit City in Maryland.

A question is whether or not this growth is sustainable. P.C. Richard is private, so it's hard to nail down its financial situation. Best Buy's sales at stores open at least a year in December were very strong, rising 8.5%, showing that the retailer is doing extremely well right now. Hhgregg, which releases its latest financial information later this week, didn't do so well in its prior quarter, when same-store sales dove 9.4 percent. Jeffries & Co. also recently downgraded hhgregg.

Overall, it's probably good news that consumer electronics retailers are expanding and taking up spaces vacated by Circuit City. Best Buy's sales results are encouraging as well. The retail industry can only hope that other chains replacing the market share left behind by Circuit City don't eventually share its fate.