Radio Shack to close more than 1,000 stores
NEW YORK (CNNMoney) — Electronics retailer Radio Shack plans to close as many as 1,100 stores — or nearly 20% of its locations.
The company said Tuesday that the closings will leave it with more than 4,000 stores, including 900 operated as franchise locations.
Radio Shack also reported that sales at stores open at least a year fell 19% in the last quarter, which included the important holiday shopping period. It blamed the drop on traffic declines and weak sales of mobile devices such as cell phones. Its net loss in the period roughly tripled.
Radio Shack has one of the largest footprints of any U.S. retailer, with about 5,200 locations in the United States. Company filings say that more than 90% of the U.S. population lives within about a five-minute drive of a Radio Shack location.
It has 27,500 employees worldwide. The number of jobs that will be lost in the store closings was not disclosed, nor were the locations.
Radio Shack has also publicly admitted its current stores are out of date and in need of a massive overhaul. Its Super Bowl ad this year was a self-deprecating acknowledgment that its stores are stuck in the 1980s.
Brick-and-mortar retailers, especially those in electronics such as Radio Shack and Best Buy have faced particularly tough competition from online retailers such as Amazon in recent years. Shoppers are likely to engage in a practice known as “showrooming” in which they go to a brick-and-mortar store to look at a product, but then purchase it online, generally at a lower price. Best Buy is also in the process of closing stores as part of its own cost-cutting effort.
Shares of Radio Shack plunged more than 20% in premarket trading on the news.