Radioshack Celebrates One Year Anniversary Of Closing 500 Stores By Closing 500 More
If it seems like it was exactly a year ago that turmoiling retailer Radioshack shut down 500 stores due to lack of consumer interest in its wares (and or consumer disposable cash), it is because it was. So how does Radioshack demonstrate its morbid sense of humor on the one year anniversary of said announcement? Well, by closing another 500, or about 12% of the retailer's total 4500 outlets currently in existence.
The WSJ reports that the company which once was the butt of all LBO-rumor jokes (and still is, only this time in the context of an M&A-rumor with JCPenney and/or the Joseph A. Wearhouse joint venture), is "planning to close around 500 stores in the coming months as the electronics retailer continues working with advisers to restructure the company."
RSH's pre-bankruptcy operation problems are well-documented. And funded - "in October, RadioShack secured $835 million in loans to refinance about $625 million of debt. Those funds, from a group led by GE Capital, also freed up cash for RadioShack's overhaul." Of course, when said overhaul fails, the loans rolls into a DIP loan which funds the company's bankruptcy.
As was well-documented during the Super Bowl, the Fort Worth, Texas, retail chain has been working on transforming its image from an old-school electronics store into a destination for shoppers looking for entertainment gadgets, like headphones and smartphone cases. Sadly, it appears to not be working.
The retailer has struggled to reverse a string of losses deepened by a sales strategy focused around smartphones, which failed to improve revenue over the past two years.
RadioShack executives last year suggested the company would resist downsizing its store footprint as they focused most of their attention on reinventing the brand's image. Stores might close in one section of a neighborhood to set up shop in more highly trafficked locales, but the number of outlets would stay the same, they had previously said.
"I think we're a 4,000-plus network," RadioShack Chief Executive Joe Magnacca said in a November interview. "My job is to make sure that we've got the market covered."