RadioShack to close up to 700 stores

[TexasStooge]

FORT WORTH, Texas (WFAA ABC 8/AP) — Electronics retailer RadioShack Corp. on Friday said fourth-quarter earnings dropped 62 percent and said it plans to close 400 to 700 underperforming stores and distribution centers in Charleston, S.C., and Southhaven, Miss., as part of a plan to improve its financial performance.

Its shares sank 95 cents, or 4.6 percent, to $19.80 in premarket trading.

The profit decline reflected a $62 million writedown in the value of its inventory, higher promotional expenses and a merchandise shift.

It earned $49.5 million, or 36 cents per share, in the three months ended Dec. 31, down from $130.9 million, or 81 cents per share, a year earlier. The company earned 38 cents per share in the latest quarter excluding the effect of an accounting change.

Revenue grew 5 percent to $1.67 billion from $1.59 billion, helped by a 4 percent increase in stores open at least a year.

"Sales results were good in many low-margin non-wireless categories; however, we experienced lower sales in high-margin categories," said David Edmondson, president and chief executive of the Fort Worth-based company, in a statement. "In addition, wireless sales and profits were below our expectations."

"The poor fourth quarter performance caused us to take a much deeper look at the state of our business and resulted in the launch of a turnaround plan including the significant fourth quarter inventory write-down," he added.

For the full year, the company earnings fell to $265.3 million, or $1.78 per share, from $337.2 million, or $2.08 per share. Revenue climbed to $5.08 billion from $4.84 billion.

The company said net income was lowered by $19 million from transition costs related to the termination of its agreement with Verizon Wireless, with most of those costs in the fourth quarter.

"RadioShack failed to achieve its financial objectives in 2005. We implemented several key changes ... but we must move at a much faster pace with a greater sense of urgency, and that is what necessitates our turnaround plan," Edmondson said.

RadioShack said the stores it plans to close are company-operated. There are nearly 7,000 RadioShack stores operated by either the company or dealers and more than 700 wireless kiosks. It also has more than 100 stores in Mexico.

[azsnowman]

I guarantee one that SHOULD be closed is the Pinetop Store It's a LONG story but to make it short, the owner is a COMPLETE, TOTAL JERK Shortly after Hurricane Katrina we had a woman move here from New Orleans, she had bought a TV from a Radio Shack in NO, it broke shortly after she bought it.....well, she HAD the receipt from the store in N.O. and this JERK would NOT take it BACK, he said and I quote, "You'll HAVE to take it BACK to the store where you bought it at!" in a SNOTTY voice.............she said that the store was GONE thanks to Katrina but the JERK would NOT listen

Sadly, I HAVE to go there for the radio equipt for the PD as they have an account there!

Dennis

[gtalum]

I cannot understand how Radio Shack stays in business.

[conestogo_flood]

Radio Shacks here in Canada all turned to The Source by Circuit City about 2 years ago.

[O Town]

The very few times I have been in there the past few years, there is never anyone in there. I agree gtalum, I don't know how they stay in business either.