RadioShack closing 1,100 stores as troubles grow
Published: Wednesday, March 5, 2014 at 1:17 p.m.
Last Modified: Wednesday, March 5, 2014 at 1:17 p.m.
There will soon be about 1,100 fewer places to buy batteries.
RadioShack said Tuesday that it plans to close up to 1,100 stores, about a fifth of its U.S. locations. The news came as the retailer reported a wider quarterly loss after a disappointing holiday season. Its stock tumbled 16 percent in afternoon trading.
CEO Joseph Magnacca said in statement that the store closings would leave RadioShack with more than 4,000 U.S. stores, including more than 900 dealer franchise locations. The company didn't immediately identify which stores will be closed or how many jobs would be affected.
A call to the company, based in Fort Worth, Texas, was not immediately returned.
The closures represent just the latest setback for RadioShack, which has been struggling to update its image and compete with the rise of online retailers in recent years. In addition to slashing costs and shuffling management, RadioShack has been renovating its stores with a more modern look.
The company ran an ad during the Super Bowl poking fun at its own outdated image. The spot showed characters from the 1980s including Alf, Chucky, Hulk Hogan and Teen Wolf ransacking its store.
The efforts have yet to take hold, however. On Tuesday, Magnacca said the latest quarter's performance was hurt by a slowdown in customer traffic, increased promotional activity, as well as "a few operational issues."
Sales at stores open at least a year — a key indicator of a retailer's health — sank 19 percent.
The company said that the stores targeted for closures are being selected based on location, area demographics, lease duration and financial performance.
For the three months ended Dec. 31, RadioShack Corp. lost $191.4 million, or $1.90 per share. That compares with a loss of $63.3 million, or 63 cents per share, a year earlier.
Olive Garden has a plan to win back customers: a new logo and yet more menu changes.
In a call with analysts on Monday, executives at Darden Restaurants Inc. expressed confidence they could bring about a "brand renaissance" at the Italian chain with a new look and updated menu that presented food with "flair and sophistication." The changes include more small dishes and the option to mix and match pastas and sauces.
Darden executives also continued to make the case for why it made sense to hold onto Olive Garden and spin off or sell only Red Lobster, rather than keeping the two struggling chains together and separating them from the company's more promising specialty restaurant unit, which includes Capital Grille and Yard House.
"We certainly recognize that industry dynamics have changed considerably over past two years," CEO Clarence Otis said during the call, acknowledging the need to make drastic changes.
The remarks came as Darden Restaurants Inc. reported preliminary quarterly results that fell short of Wall Street expectations as sales continue to slide at its two flagship chains. It said sales are expected to drop 5.4 percent at Olive Garden restaurants open at least a year. At Red Lobster, the figure is expected to fall 8.8 percent.
Customer traffic declines were even steeper, falling as much as 13 percent at Olive Garden in December and 19 percent at Red Lobster in January.
The Orlando-based company partly blamed rough winter weather for the results. But Darden has been battling shifting industry trends for years now, with people moving away from casual dining chains where tips for waiters and waitresses push up a meal's cost.
Darden has tried making numerous changes at Olive Garden and Red Lobster to better reflect today's eating habits, but the efforts have failed to take hold so far.
J.C. Penney is reporting a small profit in the fourth quarter, but the beleaguered retailer suffered a revenue shortfall as it struggles to win back shoppers.
The retailer, based in Plano, Texas, says that it earned $35 million, or 11 cents per share, in the three-month period ended Feb. 1. That compares with a massive loss of $552 million, or $2.51 per share, in the year-ago period.
Revenue slipped 2.6 percent to $3.78 billion.
Excluding a tax benefit and other items, Penney had a loss of $206 million, or 68 cents per share, in the quarter.
Analysts had expected a loss of 81 cents on revenue of $3.84 billion.
Revenue at stores opened at least a year was up 2 percent.