New York, NY, United States (4E) – RadioShack Corp. plans to close a fifth of its total stores in the U.S. following a significant fall in sales during the holidays, resulting to a $400mn loss in 2013.
The company said that up to 1,100 poorly performing stores are scheduled for closure, but did not identify their locations, provided a deadline or estimated the number of affected employees. The decision shows the struggles of the gadgets and tech accessories retailer in adapting to the intensifying competition in the electronics sector.
The company lost $191.4mn, or $1.90 per share, in the fourth quarter. Revenue dropped 20 percent from the same period in 2012 to $935mn. Sales at stores open at least 12 months fell 19 percent, partially because of poor sales in mobile phones. RadioShack posted a loss of around $400mn for the full-year 2013, compared with $139mn in the previous year.
Around 5,000 to 10,000 employees will be affected by the store closures, though some of those workers could be transferred to other locations, according to analyst Scott Tilghman of B. Riley & Co.
The chain said the weak results were caused by a fall in shopper traffic, deep promotions by rivals, and slow sales of tablets, phones and accessories, which typically comprise half of the company’s sales.