The struggling U.S. electronics retailer RadioShack is set to close 500 stores as part of its restructuring effort.
The sales of the retailer have been in free-fall due to executives departing from the company and stiff competition from rivals.
A recent Wall Street Journal report cites people familiar with the matter and suggests that RadioShack is planning to close about 500 of its retail stores in the coming few months. The company has over 4,300 stores across the U.S. but it's not known which stores will be closed and when. The people familiar with the matter also pointed out that it is normal for companies to shut down stores when going through a restructuring.
A RadioShack ad appeared during the Super Bowl on Sunday, featuring Hulk Hogan and some other 1980s personalities dismantling a company's store.
"The news was a cold dose of reality after the upbeat feeling generated by the commercial, which was widely considered one of the best that aired during the big game Sunday night. In the commercial, RadioShack poked fun at its outdated image by bringing in a crowd of throwback characters from the 1980s, including Hulk Hogan, Erik Estrada and Alf, who purport to want their store back and proceed to tear out the shelves and haul away products," reports The Wall Street Journal.
The electronics retail chain is trying hard to transform its image as a destination for shoppers looking for entertainment gadgets, smartphone cases and headphones. In October 2013, RadioShack also secured $835 million in loans to refinance around $625 million of debt, which will help the retailer in the restructuring.
In November 2013, the company indicated that it will not shrink the number of retail stores it has. Though some of the company's stores may close, RadioShack said it plans to open stores in locations where there is high traffic.
RadioShack has not publicly announced its plans to close down 500 stores. However, the company may reveal details of the same when it releases its financial results for the fourth quarter later this month.
Following the Super Bowl ad on Sunday, Feb 2, the share price of the company jumped more than 7 percent on Monday, February 3. However, on Tuesday, February 4, RadioShack's shares slipped 4.8 percent to $2.36. On Friday, shares of RadioShack were up 5.86 percent at $2.35 on the NYSE during afternoon trading session.
