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RadioShack closing 1,100 stores

By Candice Choi & Michelle Chapman

AP Business Writers

POSTED:
LAST UPDATED: 02:18 p.m. HST, Mar 04, 2014


NEW YORK >> There will soon be about 1,100 fewer places to buy batteries.

RadioShack said Tuesday that it plans to close up to 1,100 stores, or about a fifth of its U.S. locations. The news came as the retailer reported a wider quarterly loss after a disappointing holiday season. Its stock tumbled 16 percent in afternoon trading.

CEO Joseph Magnacca said the closings would leave the company with more than 4,000 U.S. stores. That's still far more than Best Buy, which has roughly 1,400 U.S. locations, and makes RadioShack stores nearly as common as Wal-Mart.

RadioShack didn't immediately identify which stores will close or how many jobs would be affected. A call to the company, based in Fort Worth, Texas, was not returned.

The closings represent just the latest setback for RadioShack, which is fighting to update its image and compete with the rise of online and discount retailers.

Long known as a destination for batteries and obscure electronic parts, RadioShack has sought to remake itself as a specialist in wireless devices and accessories. But growth in the wireless business is slowing, as more people have smartphones and see fewer reasons to upgrade.

In addition to slashing costs and shuffling management, 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 The spot got glowing reviews for poking fun at the company's outdated image by showing characters from the 1980s including Alf, Chucky and Teen Wolf ransacking its store.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 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 closings are being selected based on location, area demographics, lease duration and financial performance.

For the three months that 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 43 cents, or 16 percent, to $2.29. The stock is down about 22 percent in the past year. It was still trading above $20 less than three years ago.







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ryan02 wrote:
Now where am I gonna buy my record needle and 45 insert?
on March 4,2014 | 08:34AM
loquaciousone wrote:
AARP has all the answers for old futs.
on March 4,2014 | 08:39AM
Ewasohappy wrote:
I've often wondered how they stay in business. There are more associates than customers.
on March 4,2014 | 08:35AM
loquaciousone wrote:
Radio Shack's idea of customer service is to play the music too loud, make it hard to find items, and ignore the customers. Good way to run a business.
on March 4,2014 | 08:40AM
Roosevelt wrote:
How about changing its name? What's a "radio"?
on March 4,2014 | 08:50AM
false wrote:
The name "Radio Shack" alone conjures up visions of an outdated era where old radios were repaired and vacuum tubes replaced. Pentodes, triodes, diode tubes? Most folks never heard of them. Change the name to something more relevant.
on March 4,2014 | 09:21AM
iwanaknow wrote:
How soon will the store in Windward Mall disappear?
on March 4,2014 | 09:25AM
HAJAA1 wrote:
Probably because they spend 20% of your purchasing time trying to squeeze personal info from you, and then urging you to buy batteries.
on March 4,2014 | 09:41AM
cojef wrote:
Probably a great profit ratio of sales.
on March 4,2014 | 09:57AM
LRC wrote:
LOL @ buying batteries. Flash back - you're so right!
on March 4,2014 | 11:55AM
Skyler wrote:
RadioShack used to be awesome; now, not so much. The 'help' knows nothing about electronics, just phones.
on March 4,2014 | 10:13AM
loquaciousone wrote:
Yup. I asked the sale girl for a male to female jack and she slapped me in the face.
on March 4,2014 | 01:19PM
Schmidtke1410 wrote:
It depends which one you got to. The guy at the King and Punahou St. one knows his stuff and can really help you. The Ala Moana one...not so much.
on March 4,2014 | 01:33PM
LRC wrote:
Radio Shack?? Who even shops there anymore? What an antique store, that definitely needs a make over. But I think it's too late for that. They should've followed in Best Buy's footsteps. It won't be long before they're another Blockbuster.
on March 4,2014 | 11:56AM
nigelUV001 wrote:
Radio Shack is dated and the staff practice old fashioned customer service. They greet you and ask what you need. They direct you to their limited stock, find what you need and then direct you to the cash register where they ask if you need batteries. At least they got rid of the wooden cash drawers and don't harass you about your phone number like they used to. It's interesting that the Apple store is like the opposite of Radio Shack. There are a lot of staff in the Apple store and you still have a hard time finding someone to help you. What are the "geniuses" doing??? Maybe Radio Shack should sell Apple stuff.
on March 4,2014 | 02:30PM
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