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RadioShack to close up to 1,100 stores across nation
NEW YORK (AP) - RadioShack plans to close up to 1,100 stores in the U.S. as its troubles continue to grow.
The struggling electronics retailer made the announcement Tuesday while reporting a wider quarterly loss after a disappointing holiday season. Its stock tumbled 14 percent in midday trading.
CEO Joseph Magnacca said the closures would leave RadioShack with more than 4,000 U.S. stores, including more than 900 dealer franchise locations. The company didn't immediately identify which stores will be closed or how many jobs would be affected.
A call to the company, based in Fort Worth, Texas, was not immediately returned.
The closures represent just the latest setback for RadioShack, which is fighting to update its image and compete with the rise of online and discount retailers. In addition to slashing costs and shuffling management, for instance, RadioShack has been renovating its stores with a more modern look.
"Since I joined the company, it has been clear we need to change the conversation about RadioShack," Magnacca said during a call with analysts.
He pointed to the success of the company's Super Bowl ad as an example of "exactly the kind of disruption we needed." The spot poked fun at its outdated image by showing characters from the 1980s including Alf, Chuck and Teen Wolf ransacking its store. Magnacca also outlined various efforts the company is taking, such as revamping its product mix and working to identify trends in electronics earlier.
Still, he conceded that the turnaround push is taking longer than expected because the company was "weak" in many areas and "just broken" in others. The latest quarter's performance was also hurt by a slowdown in customer traffic and increased promotional activity.
Sales at stores open at least a year a key indicator of a retailer's health sank 19 percent.
The company said that the stores targeted for closures are being selected based on location, area demographics, lease duration and financial performance.
For the three months ended Dec. 31, RadioShack Corp. lost $191.4 million, or $1.90 per share. That compares with a loss of $63.3 million, or 63 cents per share, a year earlier. Excluding certain items, the company lost $1.29 per share. Analysts surveyed by FactSet expected a loss of 16 cents per share.
Revenue declined to $935.4 million from $1.17 billion. Wall Street was looking for higher revenue of $1.12 billion.
RadioShack reported a full-year loss of $400.2 million, or $3.97 per share. In the prior year it lost $139.4 million, or $1.39 per share. Its adjusted loss was $3.04 per share. Annual revenue declined 10 percent to $3.43 billion from $3.83 billion.
Shares of RadioShack fell 38 cents, or 14 percent, to $2.34. The stock is down about 22 percent in the past year.