RadioShack to close 500 stores.

[coredumped]

Sad news, RadioShack is said to be closing 500 of their 4500 stores. It's not yet announced which stores will be closed.

RadioShack Corp. is planning to close around 500 stores in the coming months as the electronics retailer continues working with advisers to restructure the company, people familiar with the matter said Tuesday.

It is unclear which of RadioShack's roughly 4,500 stores will be closed and when exactly the closings will begin, these people said, adding that it isn't unusual for companies to close stores when going through operational restructurings.

In October, RadioShack secured $835 million in loans to refinance about $625 million of debt. Those funds, from a group led by GE Capital, also freed up cash for RadioShack's overhaul.

The Fort Worth, Texas, retail chain has been working on transforming its image from an old-school electronics store into a destination for shoppers looking for entertainment gadgets, like headphones and smartphone cases.

RadioShack enlisted the help of well-known '80s personalities in its Super Bowl commercial Sunday. RadioShack

RadioShack advertised in Sunday evening's Super Bowl, with a commercial that poked fun at the company's outdated image with a collection of 1980s-era entertainment personalities. The ad, seen as one of the big winners in Super Bowl advertising Sunday night, generated positive reviews. The company's stock jumped more than 7% Monday morning.

The retailer has struggled to reverse a string of losses deepened by a sales strategy focused around smartphones, which failed to improve revenue over the past two years.

RadioShack executives last year suggested the company would resist downsizing its store footprint as they focused most of their attention on reinventing the brand's image. Stores might close in one section of a neighborhood to set up shop in more highly trafficked locales, but the number of outlets would stay the same, they had previously said.

"I think we're a 4,000-plus network," RadioShack Chief Executive Joe Magnacca said in a November interview. "My job is to make sure that we've got the market covered."

That was before the entire retail sector suffered a fiercely competitive holiday shopping season that eroded stores' margins while doing little to attract new foot traffic.

In mid-January, RadioShack named Dollar General Corp. DG +0.50% executive John W. Feray as chief financial official, with plans to start this week.

RadioShack's interim CFO Holly Etlin, from turnaround firm AlixPartners, will continue advising the company on its operational turnaround, according to a January statement from the company.

http://online.wsj.com/news/article_email/SB10001424052702303442704579362870830018510-lMyQjAxMTA0MDAwNDEwNDQyWj

[chipwich]

Did this come as a surprise to anyone?

The glimmer of hope for Radio Shack at this point is the fact the big box retailers such as Best Buy are also struggling as well.

Best Buy cannot wait to downsize their stores.  Likewise, Radio Shack is still too small to compete or offer enough relevant products.  Unless they change their business model, it is hard to see Radio Shack make it as a retailer.

[mtraininjax]

Amazon is killing them. The goal of Bezos is to deliver same day items are ordered, with that, Radio Shack is dead.

[coredumped]

Lots of jobs behind those closings. I've been to RadioShack a few times over the past few years and from what I can see all they really sold was phone chargers and contracts.
Maybe they should try to be like a small best buy, including the price matching that best buy does with Amazon.

[JeffreyS]

Are they giving them back to the 80's?

[spuwho]

Radio Shack is one of the few retailers who keep opening new stores when the majority of them have year over year flat sales or barely at the national growth rate.

You can't grow selling batteries, wall warts, kids electronic toys at Christmas and the odd overpriced cable (which they will sell you an extended warranty on no less!)

Since they were owned by Tandy years ago, they have shown no appetite for risk. Their website has been considered a fraud risk at times. They invented selling personal computers by retail, then sold it. They started the first big box electronics store (Future Shop and Incredible Universe) then sold it. They were the first to carry consumer cell phones for all carriers, and they still sell cell phones for all carriers since they don't own them outright.

They were the first catalog sales solely for electronics. The release of their catalog in the Fall used to be a real big deal. They were the king in the OEM electronics world at one time having a brand label for almost everything.

But the management, extremely conservative, shrunk the stores and withdrew product offerings every year through the late 80's until they reached their current state, which has as much value as Subway.

[thelakelander]

Radio Shack is still around?  The last Radio Shack I went in was in a Central Florida shopping center anchored by a Zayre and a Kash n' Karry.

[tufsu1]

Are they giving them back to the 80's?

exactly my thought

[coredumped]

It's now being reported that 1,100 stores will be closing, not 500:
http://www.theverge.com/2014/3/4/5469176/radioshack-will-close-1100-stores-twice-as-many-as-expected
that's almost 25%.

[BridgeTroll]

http://www.youtube.com/v/nHbKmSp1r7E

http://www.youtube.com/v/J2jRuh1bAxw

http://www.youtube.com/v/694TX2lQ7Uo

[IrvAdams]

RS was the thing back in the day; their store is where I saw my first Apple computer in the 70s. Nowadays, they cannot compete with online purchase. Most people wanting electronic parts, etc. are savvy enough to be able to describe what they want well enough to shop for it online, where the prices can be a fraction of RS. Best Buy and others are suffering with this as well.

[KenFSU]

Where will I go for a $40 HDMI cable now?

[KenFSU]

From the Onion, circa 2007.

Even CEO Can't Figure Out How RadioShack Still In Business

FORT WORTH, TX—Despite having been on the job for nine months, RadioShack CEO Julian Day said Monday that he still has "no idea" how the home electronics store manages to stay open.

"There must be some sort of business model that enables this company to make money, but I'll be damned if I know what it is," Day said. "You wouldn't think that people still buy enough strobe lights and extension cords to support an entire nationwide chain, but I guess they must, or I wouldn't have this desk to sit behind all day."

The retail outlet boasts more than 6,000 locations in the United States, and is known best for its wall-sized displays of obscure-looking analog electronics components and its notoriously desperate, high-pressure sales staff. Nevertheless, it ranks as a Fortune 500 company, with gross revenues of over $4.5 billion and fiscal quarter earnings averaging tens of millions of dollars.

"Have you even been inside of a RadioShack recently?" Day asked. "Just walking into the place makes you feel vaguely depressed and alienated. Maybe our customers are at the mall anyway and don't feel like driving to Best Buy? I suppose that's possible, but still, it's just...weird."

A RadioShack store that somehow manages to bring in enough paying customers to turn a profit.

After taking over as CEO, Day ordered a comprehensive, top-down review of RadioShack's administrative operations, inventory and purchasing, suppliers, demographics, and marketing strategies. He has also diligently pored over weekly budget reports, met with investors, taken numerous conference calls with regional managers about "circulars or flyers or something," and even spent hours playing with the company's "baffling" 200-In-One electronics kit. Yet so far none of these things have helped Day understand the moribund company's apparent allure.

"Even the name 'RadioShack'—can you imagine two less appealing words placed next to one another?" Day said. "What is that, some kind of World War II terminology? Are ham radio operators still around, even? Aren't we in the digital age?"

"Well, our customers are out there somewhere, and thank God they are," Day added.

One of Day's theories about RadioShack's continued solvency involves wedding DJs, emergency cord replacement, and off-brand wireless telephones. Another theory entails countless RadioShack gift cards that sit unredeemed in their recipients' wallets. Day has even conjectured that the store is "still coasting on" an enormous fortune made from remote-control toy cars in the mid-1970s.

Day admitted, however, that none of these theories seems particularly plausible.

"I once went into a RadioShack location incognito in order to gauge customer service," Day said. "It was about as inviting as a visit to the DMV. For the life of me, I couldn't see anything I wanted to buy. Finally, I figured I'd pick up some Enercell AA batteries, though truthfully they're not appreciably cheaper than the name brands."

"I know one thing," Day continued. "If Sony and JVC start including gold-tipped cable cords with their products, we're screwed."

In the cover letter to his December 2006 report to investors, "Radio Shack: Still Here In The 21st Century," Day wrote that he had no reason to believe that the coming year would not be every bit as good as years past, provided that people kept on doing things much the same way they always had.

Despite this cheerful boosterism, Day admitted that nothing has changed during his tenure and he doesn't exactly know what he can do to improve the chain.

"I'd like to capitalize on the store's strong points, but I honestly don't know what they are," Day said. "Every location is full of bizarre adapters, random chargers, and old boom boxes, and some sales guy is constantly hovering over you. It's like walking into your grandpa's basement. You always expect to see something cool, but it never delivers."

Added Day: "I may never know the answer. No matter how many times I punch the sales figures into this crappy Tandy desk calculator, it just doesn't add up."

[funwithteeth]

Best Buy will be happy to sell you HDMI cables at a 500% markup, KenFSU.

[KenFSU]

Best Buy will be happy to sell you HDMI cables at a 500% markup, KenFSU.

FANTASTIC, thanks for the heads up.

Hopefully they have something gold-tipped.

Will gladly pay the extra $60 for the additional hertz.