What: RadioShack is planning to close 1,100 stores, after releasing its Q4 financial results.
Why it matters: Sales dropped significantly over the holidays, highlighting the challenges many brick and mortar retailers face to adapt to the digital age.
Electronics retailer RadioShack has announced its’ plans to close 1,100 stores , after releasing its Q4 financial results, which showed a huge drop in sales over the holidays, sending its stock down 23%. RadioShack’s sales have fallen mainly due to executive departures, tough competition and an image problem.
Sales at stores open at least a year fell 19 percent in the fourth quarter on weak customer traffic. This resulted in an adjusted net loss of US $1.29 per share from US $0,63 a year earlier, which was much worse than the US $0.13 expected by analysts.
Sales fell to US $935.4 million in the quarter covering the holiday season, from US $1.17 billion in the year-ago period.
The planned closures would leave Radioshack with over 4,000 stores, including over 900 dealer franchise locations. “Our fourth quarter financial results 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,” said CEO Joseph Magnacca.“We will continue to have a strong, unmatched presence across the U.S. with over 4,000 stores including over 900 dealer franchise locations,” he added.Store closures will be carried out, despite Radioshack’s repeated attempts to survive to substantial market losses in the wireless business and the tech retail arena, which, in turn, were the result of huge changes in consumer electronics retailing as new players like Amazon have aggressively entered the market. In a recent interview with Portada, Director of Integrated Marketing at RadioShack Javier Figueroa , referred to RAdioShack’s recent rebranding campaign.