RadioShack Reports Poor 2013 Holiday Season, Closing 1,100 Stores
March 4, 2014 2:55 PM
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These 1,100 stores represent about a fifth of its total
After a harsh holiday season with deeper cuts than expected, RadioShack is
closing 1,100 stores
across the U.S.
These 1,100 stores represent about a fifth of its total, with about 4,000 stores remaining once the closings are complete.
RadioShack originally planned to only close about 500 stores after a disappointing holiday season in 2013, but the now that the numbers are in, the electronics chain more than doubled that number to match its losses.
The drop in holiday sales for 2013 left RadioShack with a loss of $400 million USD for that year.
For Q4 2013 specifically, RadioShack reported a $191.4 million loss, which was much worse than the $63.3 million loss a year earlier. Revenue also fell 20 percent to $935.4 million.
[SOURCE: Seeking Alpha]
To top it off, RadioShack shares dropped 28 percent in early trading after the company reported that store sales decreased by 19 percent over the holiday quarter.
"Our brand equity remains strong, reflected in the sales growth we're seeing in our new Concept Stores which redefine the
store experience," said
Joseph C. Magnacca
, chief executive officer. "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."
The company said that causes for the poor holiday season was better deals from rivals, reduced shopping traffic and weak sales in smartphones and tablets, which accounts for about half of the company's sales.
Radio Shack isn't the only electronics chain suffering from weak sales due to better deals from online competitors. In 2012, the chain gave a list of
50 store closings
in the U.S. and also
closed its UK stores
earlier that year.
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Convenience is dying as prices drop
3/4/2014 4:34:41 PM
People can mock Radio Shack and Sears but low low prices often come with low low convenience.
Sears, for instance, offers a 5 year extended warranty on appliances -- one that can be extended. Given the extremely low quality of GE dehumidifiers (and their fridges), for instance, you may end up buying a new one every year or two like I had to. Sure, those lower prices seem nice until you realize you're spending more in money, time, and effort to deal with low-grade merchandize that is not backed by any sort of reasonable service.
We also like our Kenmore dishwasher but the extended warranty has been a great thing since the circuit board went out after seven years and would have cost us hundreds. We live in a lightning-prone area so extended appliance warranties are worth their weight in gold -- regardless of the planned obsolescence model that involves making things that break after a few years at best.
Being able to walk into a store and get help with something is something you can't do with Newegg, home of the friendly restocking fee. I was able to take a video game console into a Radio Shack and get the right replacement adapter. My mother did the same thing with her old laptop. Sure, I could find this stuff on Ebay and go through a lot of trouble to get it.
Often enough you get what you pay for. Those high-priced items at Radio Shack give people jobs and give customers convenience. The same thing is true for cashiers at grocers and stores like Wal-Mart. People are so willing to throw away their valuable time and energy to save a few cents on the dollar.
And, as far as the US postal service goes, it is the most efficient public mail service in the world.
RE: Convenience is dying as prices drop
3/4/2014 10:42:57 PM
Completely agree. 1,100 stores...when i saw that i got sick to my stomach. Those are thousands of human beings who just lost their jobs and means to support themselves. The future is looking very grim.
I have a soft spot for radioshack. I worked in an arcade for a couple years in my early 20s and they always came through with their rows of obscure parts when a machine needed some work. Good little place, if a little anachronistic. It'll be sad to see them go. Before long there won't be any more 'thems' left.
RE: Convenience is dying as prices drop
3/5/2014 10:33:01 PM
"Completely agree. 1,100 stores...when i saw that i got sick to my stomach. Those are thousands of human beings who just lost their jobs and means to support themselves. The future is looking very grim."
Meh, not so much.
How many Radio Shack retail store employees are the household bread winners providing for a family from that job? A very small number I'd wager.
How many of them are teenagers living with their parents in upper-middle class neighbourhoods? Probably the vast majority. Of the five Radio Shack retail stores in my area, I don't think I've seen an employee over ~25 years old at any of them.
RE: Convenience is dying as prices drop
3/6/2014 4:34:36 AM
I believe that the principle of Conservation of Mass and Energy also applies to jobs. That is to say that jobs can neither be created or destroyed (relative to the population size)--that they only change form.
Robots doing assembly-line work may replace workers on the assembly line...but now require technicians to maintain and programmers to develop their execution routines. Mom and Pop stores dying off when Wal-Mart comes to town give rise to Mom and Pop stores selling on Amazon and Ebay. Don't mourn over job losses; instead, look towards the future with wonderment and optimism at what new jobs will develop.
As to the history of Radio Shack, as a kid in the 80's, it was THE place with the coolest stuff. Where Radio Shack missed its calling was Newegg.com. If Radio Shack had envisioned the potential online--it could be that Newegg never even existed. Instead...as with Best Buy...Radio Shack kept blindly (almost dogmatically) pushing ahead in the veins that its CEO's deemed best.
This is the 21st century. Expect to see a LOT of brick & mortar stores dying off. Expect to see a substantial increase in transportation and freight. There will be jobs...just different ones from those that existed before.
"Nowadays you can buy a CPU cheaper than the CPU fan." -- Unnamed AMD executive
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