Radio Shack closing over 1,000 stores

By: Matt McGovern Email
By: Matt McGovern Email
The stores closing are at lower performing locations that were predicted to lose money this year.

Radio Shack

(CNN) - Radio Shack said Tuesday that the closings will leave it with more than 4,000 stores, including 900 operated as franchise locations.

The company also reported that sales at stores open at least a year fell 19% in the last quarter, which included the important holiday shopping period. It blamed the drop on traffic declines and weak sales of mobile devices such as cell phones. Its net loss in the period roughly tripled.

CEO Joseph Magnacca told investors that the stores to be closed were lower performing locations had been forecast to lose money this year.

Radio Shack has one of the largest footprints of any U.S. retailer, with about 5,200 locations in the United States. Company filings say that more than 90% of the U.S. population lives or works within minutes of a Radio Shack location. Chief financial officer John Feray said that within five miles of his Fort Worth, Texas, home there are eight Radio Shack stores.

Radio Shack has 27,500 employees worldwide. The number of jobs that will be lost in the store closings was not disclosed, nor were the locations.

Radio Shack has also publicly admitted its current stores are out of date and in need of a massive overhaul. Its Super Bowl ad this year was a self-deprecating acknowledgment that its stores are stuck in the 1980s. It has closed about 100 U.S. stores each of the last two years.

Shares of Radio Shack plunged more than 13% in midday trading Tuesday on the news, although it was well above earlier lows.


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