RadioShack Plans to Shut Down 1,100 Stores
RadioShack is going through tough times. It has announced plans to close up to 1,100 out of its 4,000 stores across the US. This move is coming quite obviously. The electronics retail chain is aiming to somehow stem its current losses.
The announcement came at the same time that the company reported its fourth quarter results. Not surprisingly, RadioShack posted a $191.4 million quarterly loss. What obviously alarmed it more is the fact that comparatively, the latest loss is much wider than the $63.3 million loss it reported in the same quarter of the preceding year.
Widening financial losses
In a statement, the company explained that the recent financial results were influenced by a dismal holiday shopping season. It reiterated that during the season, most of its stores had lower foot traffic. At the same time, RadioShack launched an intense promotional activity focusing on consumer electronics.
There were also several operational issues that affected the performance of its stores. On top of all these, the company was also citing a very soft marketplace for mobility.
RadioShack assured that despite the challenging environment, it is still pursuing progress on the five factors of its turnaround strategy. It said it would continue to reposition the brand, revamp its product assortment, reinvigorate its locations, obtain operational efficiency, and generate financial flexibility.
A continuously striving retail company
It should be noted that currently, RadioShack is attempting to do good in rebranding of itself. It aims to shed its former do-it-yourself model and replace it with what it calls the do-it-together scheme. However, as analysts pointed out, the company does not have enough time to wait for the improvements.
Through the years, RadioShack has been striving to find its own niche. About a decade ago, it shed off its DIY scheme and began focusing on selling mobile phones. Because cellphone stores were considered as among the staples in American malls, such strategy helped keep the company afloat for some time. But obviously, it did not set growth for the long term. The emergence of competitor Best Buy only aggravated the situation.
Today, RadioShack is openly saying that it intends to be a major retailer of portable electronics products. It aims to focus on selling goods that come with stronger brand identity. To help attain its goals, RadioShack even hired former Walgreen executives just to help retool and rebrand the stores.