FORT WORTH—Following double-digit quarterly sales declines in the fourth quarter and mounting losses year over year, Radio Shack Corp. said Tuesday it would close as many as 1,100 RadioShack stores, about 20% of its total, with the possibility of more closings in the future. CEO Joseph Magnacca says that even after the closings announced Tuesday, “We will continue to have a strong, unmatched presence across the US with over 4,000 stores including over 900 dealer franchise locations.”
The electronics retailer said the locations that will be shuttered, subject to the consent of its lenders, were selected based on location, area demographics, lease life and financial performance. It did not identify these locations, which follow on two consecutive years of closing about 100 stores per year.
The Wall Street Journal reported Tuesday that the closings were more than twice as large as the ballpark figure of 500 that the retailer was considering a month earlier. In its annual report filing, also on Tuesday, Radio Shack said it would continue to monitor the performance of its other stores, with the possibility of additional closures beyond the round announced on Tuesday.
Net sales and operating revenues for Q4 fell 20% to $935.4 million from about $1.2 billion in the last quarter of 2012. Same-stores sales were off Y-O-Y by 19% for the quarter and 8.8% for the year, while the company’s full-year net loss rose to $400.2 million from $139.4 million the year prior; Q4′s results marked the eighth consecutive quarter of losses.
About half of the net loss for the year arose from its Q4 results. Magnacca, hired about a year ago to turn the chain’s results around, says the Q4 numbers were driven by “a holiday season characterized by lower store traffic, intense promotional activity particularly in consumer electronics, a very soft mobility marketplace and a few operational issues.”
Even so, he adds, “we’re continuing to make progress on the five pillars of our turnaround plan: repositioning the brand, revamping the product assortment, reinvigorating the stores, operational efficiency and financial flexibility.” He cites the sales growth in the company’s new Concept Stores, “which redefine the RadioShack store experience.” Further, the company lined up $835 million in five-year financing during Q4.