RadioShack to close up to 1,100 stores as earnings dip well below expectations
RadioShack on Tuesday announced it will be closing up to 1,100 stores after reporting a $400 million operating loss for 2013, highlighting the Apple retail partner's struggle with adapting to the fast-changing consumer electronics market.
According to The Wall Street Journal, RadioShack made the announcement alongside lower-than-expected quarter four financial results. The company logged a loss of $191.4 million for the quarter, up from the $63.3 million lost a year earlier.
Analysts polled by Thomson Reuters expected RadioShack to announce a per-share loss of 14 cents, but the final tally came out to a much higher $1.46 per unit. The retailer was also figured to hit $1.12 billion in sales for the December quarter, but ended up with $935.4 million, a 28-percent year-over-year drop.
Well known for having a near-critical mass of stores spread across the country, RadioShack will close up to 1,100 under-performing locations. The number accounts for approximately 26 percent of company-owned outlets.
"Within five miles of my home, I have eight RadioShack locations," said RadioShack CEO Joe Magnacca, referring to the overcrowded distribution of stores.
RadioShack reported slow sales of phones, tablets and accessories, which usually account for half of the company's business. The retail chain once catered primarily to DIY enthusiasts and was slow to adopt mainstream consumer electronics.
In recent years, the company has made efforts to offer smartphones and tablets at low prices, including regular discounts on Apple's iPhone. In 2010, for example, the Apple retail partner was the nation's second-largest iPhone seller in terms of brick-and-mortar stores that carried the device.
It appears the aggressive price cuts and limited-time-only discounts were not enough to buoy revenue, and in fact may be to blame for the poor quarterly performance.
"Simply put, we exceeded our organization's capabilities by trying to do too much too quickly," Magnacca said.
According to The Wall Street Journal, RadioShack made the announcement alongside lower-than-expected quarter four financial results. The company logged a loss of $191.4 million for the quarter, up from the $63.3 million lost a year earlier.
Analysts polled by Thomson Reuters expected RadioShack to announce a per-share loss of 14 cents, but the final tally came out to a much higher $1.46 per unit. The retailer was also figured to hit $1.12 billion in sales for the December quarter, but ended up with $935.4 million, a 28-percent year-over-year drop.
Well known for having a near-critical mass of stores spread across the country, RadioShack will close up to 1,100 under-performing locations. The number accounts for approximately 26 percent of company-owned outlets.
"Within five miles of my home, I have eight RadioShack locations," said RadioShack CEO Joe Magnacca, referring to the overcrowded distribution of stores.
RadioShack reported slow sales of phones, tablets and accessories, which usually account for half of the company's business. The retail chain once catered primarily to DIY enthusiasts and was slow to adopt mainstream consumer electronics.
In recent years, the company has made efforts to offer smartphones and tablets at low prices, including regular discounts on Apple's iPhone. In 2010, for example, the Apple retail partner was the nation's second-largest iPhone seller in terms of brick-and-mortar stores that carried the device.
It appears the aggressive price cuts and limited-time-only discounts were not enough to buoy revenue, and in fact may be to blame for the poor quarterly performance.
"Simply put, we exceeded our organization's capabilities by trying to do too much too quickly," Magnacca said.
Comments
Lol. I thought that RS was the scraping of the bottom of the barrel for Apple, after every other conceivable retailer had been tapped.
The only 'strategy' left for them is to go quietly into a corner and die.
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Radio Shack employees and managers are listed as one of the ten most underpaid and overworked group of employees in the country. Right down there with Dollar Store and others. It's a shame really, as they sell stuff you can't find anywhere else.
Besides selling Apple iDevices, they carried every conceivable brand of touch phones in the world. Waaay too many... it was a joke go in and see so many.
The retail chain once catered primarily to DIY enthusiasts and was slow to adopt mainstream consumer electronics.
And when you get into "mainstream consumer electronics" you're up against Best Buy and Target and Wal-Mart.
Oh, and there are 6 Radio Shacks within 5 miles of my house. 2 are directly across the street from each other.
The first thing I saw when I went in to get batteries was a Porsche 918 radio controlled car for $34.95.
It looked like an AT&T store but with more toys and tiny little Bluetooth speakers.
I used to get 47K Ohm resistors there when I was a kid.
Man I feel guilty...
...Is this b/c last weekend I went to RS to get a replacement pwr brick for my Ext. HD and they wanted $22 for it. I went home and got it on Amazon for $6.
Sorry.
The end of an era long overdue. Even the name . . . c'mon. Bye, bye.
I guess you must know the answer to this question, then: How much revenue do they generate for Apple? $1000? $1,0000,0000? $1,000,000,000? More? Less?
If you don't know, move along.
If you can't see that, move along.
Two questions:
What's a radio? And, what's a shack?
I need a 1100 microfarad capacitor at 25 volts. Huh? Bad Boys rape our young girls but violet gives willingly. HUH!!?!?!?!?!?
The catch is that there are likely very very few places where there isn't a carrier store, best buy, Walmart, Apple store in the same area plus being so out in ten docks that someone can't just order online.
Making it not so much a closed source but a shifting one.
They should turn themselves into mini Apple stores. There are plenty of Apple products they could sell.
The end of an era long overdue. Even the name . . . c'mon. Bye, bye.
They have changed their name a few times before but mostly their problems stem from decades of horrible mismanagement. Incompetent CEOs, awful customer service and terrible working conditions make it one of the worst companies ever. At this point they would probably do better if they became a fast food chain and take advantage of all those locations. Perhaps Taco Shack.
...Is this b/c last weekend I went to RS to get a replacement pwr brick for my Ext. HD and they wanted $22 for it. I went home and got it on Amazon for $6.
I had to get a voltmeter from my local Radio Shack not too long ago.
I kept looking at the prices and thinking to myself, “Okay, there’s something I’m missing here. There has to be some aspect of this that I’m just not getting…”