ZeroHedge – by Tyler Durden If it seems like it was exactly a year ago that turmoiling retailer Radioshack shut down 500 stores due to lack of consumer interest in its wares (and or consumer disposable cash), it is because it was. So how does Radioshack demonstrate its morbid sense of humor on the one year anniversary of said announcement? Well, by closing another 500, or about 12% of the retailer’s total 4500 outlets currently in existence.
The WSJ reports that the company which once was the butt of all LBO-rumor jokes (and still is, only this time in the context of an M&A-rumor with JCPenney and/or the Joseph A. Wearhouse joint venture), is “planning to close around 500 stores in the coming months as the electronics retailer continues working with advisers to restructure the company.”
RSH’s pre-bankruptcy operation problems are well-documented. And funded – “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.” Of course, when said overhaul fails, the loans rolls into a DIP loan which funds the company’s bankruptcy.
As was well-documented during the Super Bowl, 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. Sadly, it appears to not be working.
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, or a ‘0-precisely network.‘ And while the Shack struggles to find just what market it is that it covers, if any, the population will enjoy how it spends several months of cash flow on amusing Super Bowl gimmick ads such as this one which is a fitting – and hilarious – epitaph of what happens to every retailer that stop adapting to its current environment.
Finally, while the ultimate fate of Radioshack is quite clear to most, a far more important topic is what happens to all the commercial real estate secuiritizations and/or malls that currently have a RSH location which is about to shutter. Then again, this is the new normal, and things such a fundamentals and cash flows are merely an irrelevant footnote.
They need to get back to their roots and away from being a glorified cellphone & accessory shop.
I honestly miss the OLD Radio Shack myself, back when they had staff that knew what it was that you were talking about when you came in looking for things even as basic as Miltimeters or SWR Meters or heaven forbid O.O raw components or blank PCB’s, Current staff are doing good to know the difference between common battery types…
SNAFU said it ..If they had stayed with their original model, they wouldn’t be all screwed up like this
Well I was not a happy camper with their computers (Tandy)
They were terrible only I didnt know it at the time.
The first one I bought in 82 was a 8 megahertz, 2 ram, dos 2.1, a 20 Mb hard drive and a 1200 baud modem you had to dial yourself. I put it all together which was the box, monitor and keyboard plugged it in and looked at this blinking C:\
Oh I forgot there was one game Hangman.
It was supposed to be IBM compatible, yeah right. It wasn’t and their stuff like a cd-rom was 800 dollars.
The next time I was smarter I built my own. Really I did and back then it was not so easy as it is now. Those of you who know what I am talking about setting the jumpers. LOL
Back then when you installed something it wasn’t like today that does it auto. You had to sit there and make all kinds of decisions like setting the IRQs. Everything had a setting and you had to assign them. That was fun.
Tandy went the way of the dialing phone and the old victrolas.
God I am old.