RadioShack To Close 1,100 Stores This YearBy: Zach Walton - March 4, 2014
So, how much did RadioShack spend on that Super Bowl ad? It’s an important question as RadioShack isn’t a company that can be throwing around millions of dollars right now. In fact, it could have saved those millions of dollars to make its Q4 financial results look less dire.
RadioShack announced this morning that its total net sales for Q4 were $935.4 million, a decrease from the $1,171.4 million it made during last year’s Q4. Its gross profit was also down from last year’s $419.3 million to $278.4 million. RadioShack blames these downward turns on decreased foot traffic in its retail stores as well as “soft performance in the mobility business.”
To make matters worse, RadioShack posted a $191.4 million operating loss for Q4 compared to last year’s operating income of $16 million.
All of this has led RadioShack to the decision that it must close 1,100 of its retail locations. The stores selected for closure are based upon “location, area demographics, lease life and financial performance.”
But hey, at least that Super Bowl ad was super sweet, right?
“Our brand equity remains strong, reflected in the sales growth we’re seeing in our new Concept Stores which redefine the RadioShack store experience,” said Joseph C. Magnacca, CEO. “We have also been encouraged by the positive response to our new brand positioning around “Do It Together,” which we kicked off with our award winning Super Bowl commercial. Importantly, our key hires during the fourth quarter in merchandising, global sourcing, planning and allocation and, more recently, our new chief financial officer, round out our new leadership team as we continue to re-build the business.”
Going forward, RadioShack will attempt to return to profitability through a five step plan: “repositioning the brand, revamping the product assortment, reinvigorating the stores, operation efficiency and financial flexibility.” That all sounds well and good, but maybe it should start focusing more of its cash reserves on actually improving its stores instead of licensing dozens of characters from 80s for a silly ad.
Image via Wikimedia Commons