The Joplin Globe, Joplin, MO

Business

March 4, 2014

RadioShack announces plans to close 1,100 of its stores as revenue, earnings plummet

Many area stores are not affected

— RadioShack will close up to 1,100 stores nationwide, the company announced Tuesday. That is about one fifth of its U.S. locations.

The news came as the retailer reported quarterly and year-end losses after a disappointing holiday season.

CEO Joseph Magnacca said the closings would still leave the company with more than 4,000 U.S. stores.

Ron Jones, owner of the Radio Shack store in Joplin at 731 S. Maiden Lane, said it is a franchise or “associate” store, as is the store in Carthage.

“It will have no affect whatsoever on franchise dealer stores,” said Jones. “We have no intention of shutting down.”

Jones also had a second store in Joplin, in the Bel-Aire Shopping Center near 20th Street and Range Line Road, that opened six weeks before the 2011 tornado and then was destroyed. He has not yet opened a second store.

“It doesn’t mean anything for the franchise stores. We are still going to be around,” said Mary Porter, owner of the Carthage store, 2404 S. Grand Ave.

Stores in Columbus, Kan., and in Miami, Okla., also are franchise stores. Calls to the Monett store were not answered.

Officials with the Radio Shack store in Pittsburg, Kan., deferred calls to Radio Shack headquarters, but did confirm it is a company-owned store.

RadioShack didn’t immediately identify which stores it will close or how many jobs would be affected. A call to the company, based in Fort Worth, Texas, was not returned.

The closings represent just the latest setback for RadioShack, which is fighting to update its image and compete with the rise of online and discount retailers.

Long known as a destination for batteries and obscure electronic parts, RadioShack has sought to remake itself as a specialist in wireless devices and accessories. But growth in the wireless business is slowing, as more people have smartphones and see fewer reasons to upgrade.

In addition to slashing costs and shuffling management, RadioShack has been renovating its stores with a more modern look.

“Since I joined the company, it has been clear we need to change the conversation about RadioShack,” Magnacca said during a call with analysts.

Still, he conceded that the turnaround push is taking longer than expected because the company was “weak” in many areas and “just broken” in others. The latest quarter’s performance was hurt by a slowdown in customer traffic and increased promotional activity.

Sales at stores open at least a year — a key indicator of a retailer’s health — sank 19 percent.

The company said that the stores targeted for closings are being selected based on location, area demographics, lease duration and financial performance.

For the three months that ended Dec. 31, RadioShack Corp. lost $191.4 million, or $1.90 per share. That compares with a loss of $63.3 million, or 63 cents per share, a year earlier. Excluding certain items, the company lost $1.29 per share.

RadioShack reported a full-year loss of $400.2 million, or $3.97 per share. In the prior year it lost $139.4 million, or $1.39 per share.

 

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