Electronics retailer RadioShack has fallen on some tough times. It finds itself in the midst of a tailspin more violent than many had anticipated after years of declining sales and dwindling brand relevance.
There has been speculation that the struggling company would close up to 500 of its retail stores this month, but the company’s earnings report from the fourth quarter of 2013 has revealed a much more dire situation.
The report spelled out the retailer’s plans to close nearly 1,100 of what it calls “underperforming stores” all across the nation; that amounts to a fifth of all of the company’s locations. Specific locations to be closed were not revealed, and no employee layoffs were announced. According to the announcement, the proposed closings will be chosen and finalized based on location, area demographics, lease life and overall financial performance.
The company’s rapidly shrinking revenues are putting a certain degree of pressure on it to engineer a significant turnaround, but it has seen very little success thus far. Several recent efforts to revise and revitalize the brand’s image have fallen flat, including a self-aware Super Bowl ad that poked fun at the fact that the company still seems to be stuck in a bygone era.
The commercial was a hit with viewers and garnered more than three million hits on YouTube alone, but the spot’s popularity failed to translate into increased retail sales.
RadioShack has seen an increase in sales at newly remodeled locations, and this may provide some glimmer of hope for the future.
In a statement released Tuesday, current CEO Joseph Magnacca expressed optimism for the future of the company and faith in the company’s five-point plan that believes that its “brand equity” remains strong, even in the midst of financial turmoil.
In the fourth quarter of last year alone, RadioShack reported losses of more than $190 million; this brings its total losses for fiscal 2013 to over $400 million. Shares of RadioShack stock tumbled 14 percent Tuesday to end at $2.34 in midday trading.
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