RadioShack to close up to 1,100 stores
Publish Date: March 04, 2014
RadioShack plans to close as many as 1,100 of its 4,300 stores after a disappointing fourth quarter. "Over the past few months, we have undertaken a comprehensive review of our portfolio from many angles – location, area demographics, lease life and financial performance – in order to consolidate our store base into fewer locations while maintaining a strong presence in each market,” said CEO Joseph C. Magnacca, in a press release. “We will continue to have a strong, unmatched presence across the U.S. with over 4,000 stores including over 900 dealer franchise locations.”
The Fort Worth, Texas–based chain blamed its sluggish fourth quarter, during which total net sales fell to $935 million from $1.1 billion a year ago, on low store traffic, steep discounts and weak sales of mobile electronics. Same-store sales fell 19 percent during the quarter and the retailer lost $191.4 million.
The store closings will be part of an ongoing turnaround attempt. The chain has introduced a new store design that it is rolling out to existing units in an attempt to draw more customers. It also unveiled a new marketing campaign during the Super Bowl and hired new merchandising, global sourcing, planning and allocation executives and a new chief financial officer during the fourth quarter.
Radio Shack ended the fourth quarter with total liquidity of $554.3 million including $179.8 million in cash. The Company's total debt was $614 million at December 31, 2013, which matures between 2018 and 2019.