Store closures are part of RadioShack's turnaround plan
If you're the nostalgic type, you may want to visit your neighborhood RadioShack store and savor the moment, it may be the last. That's because RadioShack is planning to close down 1,100 retail locations in the U.S. that are "underperforming," which will leave the electronics chain with 4,000 remaining stores stateside (including over 900 dealer franchise locations). Though that's a lot of store closures, RadioShack is confident it can turn things around.
RadioShack has a turnaround plan containing five pillars. They include repositioning the brand, revamping the product assortment, reinvigorating the stores, operational efficiency, and financial flexibility.
"Our brand equity remains strong, reflected in the sales growth we're seeing in our new Concept Stores which redefine the RadioShack store experience," said Joseph C. Magnacca, CEO of RadioShack. "We have also been encouraged by the positive response to our new brand positioning around 'Do It Together,' which we kicked off with our award winning Super Bowl commercial. Importantly, our key hires during the fourth quarter in merchandising, global sourcing, planning and allocation and, more recently, our new chief financial officer, round out our new leadership team as we continue to re-build the business."
RadioShack's total net sales and operating revenues for the fourth quarter of 2013 were $935.4 million, down from $1.17 billion a year prior. Store sales dropped 19 percent year-over-year, which the chain blamed on soft performance in the mobility business. This led to a net loss of $191.4 million, or $1.90 per diluted share, compared to a net loss of $63.3 million in 2012.
For the entire year, RadioShack posted a loss of $400.2 million, or $3.92 per diluted share, compared to a net loss of $139.4 million in all of 2012.
"Without minimizing the challenges ahead, we have a detailed strategic path to profitability based upon the five pillars of our turnaround," Mr. Magnacca added. "Our entire team is focused on execution as we work to improve our performance in the coming year."