FORT WORTH, TEXAS — The decision by RadioShack (NYSE: RSH) to close up to 1,100 underperforming stores this year was due to another quarter of poor performance, says CEO Joseph Magnacca.
In the fourth quarter of 2013, Fort Worth-based RadioShack suffered a 19 percent decrease in same-store sales and a net loss of $191.4 million. That compares with a loss of $63.3 million in the fourth quarter of 2012.
“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,” said Joseph Magnacca, RadioShack CEO, in a statement issued March 4.
The 1,100 store shutterings more than doubles the 500 closures that the chain was considering in early February, as reported by the Wall Street Journal, and represents approximately one-fifth of the company’s 5,200 U.S. locations. While the specific locations of the closures have not been released, RadioShack has its largest presence in California (565 stores), Texas (408 stores), New York (342 stores), Florida (309 stores) and Pennsylvania (232 stores), according to USA Today.
The company’s well-documented downfall has included the “Fix 1500” initiative, which resulted in the reassignment or termination of more than 1,700 store managers in 2004; 400 to 450 corporate layoffs in 2006; the 2009 launch and 2011 failure of the PointMobl store concept; and the resignation of four different CEOs in a seven-year stretch from 2006 to 2013.
RadioShack has moved into the mobile device and accessory market in recent years. In 2013, launched approximately 25 concept stores with more open, interactive layouts.
“The RadioShack turnaround will take time, and results will vary,” said Magnacca in a conference call. “We’re really dialing up the experience in our stores and differentiating ourselves from big-box retailers.”
Analyst Scott Tilghman of B. Riley & Co. told USA Today that 5,000 to 10,000 company employees will be affected by the closures, with some being terminated and some reassigned to other stores.
RadioShack’s stock price closed at $2.16 per share on March 5, down from $3.06 per share a year earlier.
— John McCurdy