Press-Republican

March 5, 2014

Radio Shack to close up to 1,100 stores

DAN HEATH
Press-Republican

PLATTSBURGH — Radio Shack will close as many as 1,100 stores but as of Tuesday had not named which ones.

On Tuesday, Chief Executive Officer Joseph Magnacca announced the plan to shutter “underperforming” locations as part of the company’s report on fourth-quarter financial results. 

Radio Shack has two stores within a mile of each other in the Town of Plattsburgh: at Champlain Centre and Consumer Square shopping centers. There are also stores in Malone and Saranac Lake.

Employees at all four referred calls for information to corporate headquarters.

The company reported fourth-quarter total net sales and operating revenues of $935.4 million, compared to $1,171.4 million last year.

Comparable store sales were down 19 percent, driven by traffic declines and soft performance in the mobility business, the report says. 

‘STRATEGIC REVIEW’

Radio Shack posted a fourth-quarter net loss of $191.4 million, or $1.90 per diluted share, compared to net loss of $63.3 million last year. 

“Our focus on the brand, our operations and the in-store experience has been unfolding in parallel with a strategic review of our store footprint,” Magnacca said in a press release.

“Over the past few months, we have undertaken a comprehensive review of our portfolio from many angles — location, area demographics, lease life and financial performance — in order to consolidate our store base into fewer locations while maintaining a strong presence in each market.”

That review resulted in the plan to shut as many as 1,100 locations, he said.

“We will continue to have a strong, unmatched presence across the U.S. with over 4,000 stores, including over 900 dealer franchise locations.”

FIVE PILLARS

In December, the company completed new financing totaling $835 million, including a $585 million asset-based credit agreement led by GE Capital, Corporate Retail Finance and a $250 million secured term loan led by Salus Capital Partners LLC. 

That comprehensive new financing was used to refinance existing debt and other corporate purposes.

The stores to be closed will be selected based on location, area demographics, lease life and financial performance, the release said, and the proposed closure program is subject to the consent of the new lenders.

Magnacca said the company continues to make progress on the five pillars of its turnaround plan: repositioning the brand, revamping the product assortment, reinvigorating the stores, operational efficiency and financial flexibility. 

Email Dan Heath:dheath@pressrepublican.com