The usually ubiquitous RadioShack locations will start becoming harder to find as the retailer plans to shutter 1,100 underperforming stores in the United States.
With these stores removed from RadioShack's ranks, the chain will have 4,000 company-owned locations along with 900 franchise shops. The stores chosen to be closed were picked so RadioShack could still retain a strong appearance in most markets and to eliminate weaker performing shops. RadioShack did not say which stores will close nor did company execs give any idea as to how many positions would be eliminated. The company has about 27,500 employees worldwide.
The store closure news came during the retailer's fourth quarter earnings release, which had RadioShack posting another round of losses. For the quarter, ended Dec. 31, the chain posted a loss of $191 million, compared to a loss of $63.3 million during the same period last year. Net sales also suffered falling to $935.4 million from $1.2 billion.
RadioShack CEO Joseph C. Magnacca had a long list of reasons for the fall off.
"Our fourth quarter financial results were driven by a holiday season characterized by lower store traffic, intense promotional activity particularly in consumer electronics, a very soft mobility marketplace and a few operational issues," he said.
Magnacca did point out a few bright spots for the beleaguered chain. He said sales growth is being seen in the chain's new Concept Stores, which began opening last year, and the company is happy with the upbeat consumer response to RadioShack's new branding program.
"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," he said.
Despite these hopeful signs, the company suffered a severe financial loss for the year. Magnacca said sales for the year were down about $400 million to $3.4 billion with a net loss that grew to $400.2 million from $139.4 million the previous year.
"Without minimizing the challenges ahead, we have a detailed strategic path to profitability based upon the five pillars of our turnaround," Magnacca said. "Our entire team is focused on execution as we work to improve our performance in the coming year."
