Radio Shack, the gadget and electronic parts retailer, will be closing more than a fourth of its stores after reporting huge losses last year,according to a statement on the company’s website.
The year-end financial statement reported a net-loss of $400.2 million in 2013, after reporting losses of $139 million in 2012.
Store sales were down nearly $400 million from 2012 to 2013. The costs of products also dropped by $100 million year over year, while employee costs also declined by about $12 million. The company has more than $800 million in inventory on hand.
In reaction to the losses, which sent stock prices tumbling by more than 17 percent on March 4, according to the Wall Street Journal, the company announced that it would be closing up to 1,100 of its “under-performing stores."
Currently, Radio Shack has around 4,300 stores in the United States, including a store at the Speedway Plaza in Westborough, hundreds of stores in Mexico and others around the globe, including 900 dealer franchises. At post time, it’s unknown how many of the 30,000 people currently employed by the chain will lose their jobs or where the store closures will occur.
In a statement, CEO Joseph C. Magnacca said that the company would be focused on new “concept stores” which have shown “positive response” and added that Radio Shack's “brand equity remains strong.” The company also secured more than $800 million in “asset-based credit financing” last quarter, in an effort to refinance existing debt and keep the company afloat through the end of the year.
"Without minimizing the challenges ahead, we have a detailed strategic path to profitability based upon the five pillars of our turnaround," Magnacca said. "Our entire team is focused on execution as we work to improve our performance in the coming year."
The company’s Super Bowl ad, which featured a number of 1980s icons like wrestler Hulk Hogan and Dee Snider from glam metal band Twister Sister, highlights the company’s future “Do It Together” strategy, Magnacca noted in the statement. The ad instantly went viral and has nearly three million views on YouTube.