RadioShack (NYSE: RSH) plans to close up to 1,100 stores after reporting a much wider than expected fourth-quarter loss of $191.4 million on plunging sales in the holiday quarter.
The stores that will be shut down account for 20 percent of the chain's locations. The company didn't say where or when these stores would be closing. After the closings, the Fort Worth-based consumer electronics retailer will continue to have more than 4,000 stores, including over 900 dealer franchise locations.
RadioShack shared news of the store closures during its quarterly earnings report released Tuesday. Total net sales for the three months ended Dec. 31 were $935.4 million, down 20 percent from $1.17 billion last year. Same-store sales declined by 19 percent.
In a statement, CEO Joseph Magnacca said the poor results were the result of "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."
RadioShack also admitted it made detrimental errors during the holidays. Magnacca cited the mistake of removing 100 items with sales potential from shelves and revealed there was insufficient stocking of some higher-margin items. He also said there was poor execution in removing duplicate merchandise from stores.
Magnacca took over the helm of the struggling retailer last year and has been trying to turn around the chain with new-format stores, new management and a smaller number of stocked items. Magnacca also arranged to put RadioShack-branded shelves inside college bookstores and brought in a team to create the acclaimed Super Bowl ad that poked fun at itself by featuring 1980s celebrities to highlight its new concept stores.
-See this RadioShack press release
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