Radioshack Celebrates One Year Anniversary Of Closing 500 Stores By Closing 500 More

Zero Hedge ^ | 02/04/2014 | Tyler Durden

[SeekAndFind]

If it seems like it was exactly a year ago that turmoiling retailer Radioshack shut down 500 stores due to lack of consumer interest in its wares (and or consumer disposable cash), it is because it was. So how does Radioshack demonstrate its morbid sense of humor on the one year anniversary of said announcement? Well, by closing another 500, or about 12% of the retailer's total 4500 outlets currently in existence.

The WSJ reports that the company which once was the butt of all LBO-rumor jokes (and still is, only this time in the context of an M&A-rumor with JCPenney and/or the Joseph A. Wearhouse joint venture), is "planning to close around 500 stores in the coming months as the electronics retailer continues working with advisers to restructure the company."

RSH's pre-bankruptcy operation problems are well-documented. And funded - "in October, RadioShack secured $835 million in loans to refinance about $625 million of debt. Those funds, from a group led by GE Capital, also freed up cash for RadioShack's overhaul." Of course, when said overhaul fails, the loans rolls into a DIP loan which funds the company's bankruptcy.

As was well-documented during the Super Bowl, the Fort Worth, Texas, retail chain has been working on transforming its image from an old-school electronics store into a destination for shoppers looking for entertainment gadgets, like headphones and smartphone cases. Sadly, it appears to not be working.

The retailer has struggled to reverse a string of losses deepened by a sales strategy focused around smartphones, which failed to improve revenue over the past two years.

 

RadioShack executives last year suggested the company would resist downsizing its store footprint as they focused most of their attention on reinventing the brand's image. Stores might close in one section of a neighborhood to set up shop in more highly trafficked locales, but the number of outlets would stay the same, they had previously said.

 

"I think we're a 4,000-plus network," RadioShack Chief Executive Joe Magnacca said in a November interview. "My job is to make sure that we've got the market covered."

That, or a '0-precisely network.' And while the Shack struggles to find just what market it is that it covers, if any, the population will enjoy how it spends several months of cash flow on amusing Super Bowl gimmick ads such as this one which is a fitting - and hilarious - epitaph of what happens to every retailer that stop adapting to its current environment.

 

CLICK ABOVE LINK FOR THE VIDEO

 

Finally, while the ultimate fate of Radioshack is quite clear to most, a far more important topic is what happens to all the commercial real estate secuiritizations and/or malls that currently have a RSH location which is about to shutter. Then again, this is the new normal, and things such a fundamentals and cash flows are merely an irrelevant footnote.

[Paladin2]

As indicated before, I have three stores equidistant.

I'd be satisfied with just one as long as the inventory was kept up.

[wbill]

You can't throw a rock in my town without hitting a Radio Shack. They've oversaturated the market.

Not as much as, say, "Walgreens" or "Starbucks", but they're certainly close.

[PoloSec]

My experience with Radio Shack is that everything is way overpriced but it is a good place to find hard to get batteries.

[Dr. Bogus Pachysandra]

I miss the old Olson Electronics store. They handled a lot of neat stuff, like kits, etc..

[workerbee]

One of the top Super Bowl commercials IMO!

The Phone Call: #InWithTheNew RadioShack Commercial

[P-Marlowe]

Back in the day Radio Shack was a Mecca for young budding inventors and electrical engineers.

I’m not sure why they still exist.

[discostu]

It was funny but I don’t think it helped the brand. Really it just showed that RS used to be a great store to go to with all your electronics needs, and now they aren’t.

[I want the USA back]

They have some things that I can’t find anywhere else, but I don’t like the attitude of the people they have working there, so I shop online where possible.

I won’t miss them.

[dragnet2]

RS used to carry all kinds of electronic parts..All of that went bye bye 10+ years ago.

I learned on my own how to replace transistors, capacitors etc., do basic troubleshooting and have save thousands in repairs over the years.

I get my electrical components on-line now.

And I don’t have to deal with 27 year olds who don’t know zip about anything..

RS has phones and Chinese trinket gadgets.......When the entire country is awash in cell phones and cheap gadgets..Did RS executives go to business school to learn how to destroy a business?

[headstamp 2]

I remember the CB craze in the late 70’s and RS was the place to go for all sorts of equipment related to it.

[workerbee]

I don't know -- the most important thing is that you remember it was a RS ad. That alone helps the brand. I see your point about the message, but the optimistic side of that is that they are "returning to greatness."

[The Antiyuppie]

“I miss the old Olson Electronics store. They handled a lot of neat stuff, like kits, etc.”

That was a long time ago. 45+ years ago, one of my first “hacks” was an AM radio transmitter “sort of kit” I got from them; I also got a part to boost my walkie-talkie power. You never knew what you would find in their “prices as marked” boxes. In Chicago, they were right across from Allied Electronics, which was also a very cool place with a retail desk and shop.

[globoreally]

I went in a couple of years ago and asked for a capacitor the saleschild looked at me like I was speaking Martian

[The Antiyuppie]

Their parts are for the most part outrageously overpriced, and the quality is basically Chinese floor sweepings. I once was buying a switch and noticed that it had fallen apart in the package! I’m sure that the clerk put it back...

[dragnet2]

Now ya send in your electronics and fat screen TV’s for a $700 repair as they use a .25 cent parts to make the repair.

Or the sheep just replace it and buy a new one or spend hundreds on extended warranty rip offs.

[sten]

the population of the country barely has any capability to understand the purpose of circuit boards, diodes or capacitors let alone how to design a circuit to utilize them.

we’ve dumbed down the population to sub third world status

[The Antiyuppie]

“Now ya send in your electronics and fat screen TV’s for a $700 repair as they use a .25 cent parts to make the repair.”

I’m sorry, I just have to say something here...actually, some of the parts on a modern surface mount circuit board cost considerably LESS than $0.01...BUT...it might take several thousands of dollars of equipment to find it and some boards simply can’t be diagnosed without a five-figure test fixture. Contrast this with fixing a transistor radio with some electronics knowledge and a $5.00 VOM from Radio Shack. Worse, instead of a $7.00 soldering iron and $3.00 of solder, it might take a hot-air gun, a “reballing” station for the ball-grid-array chips, and a circuit board oven to de/resolder the part, and the solder is now fairy exotic and perishable!

[a fool in paradise]

I was in Radio Shack last month. Needed some kind of overpriced stereo whatsit connector piece.

Half of the store was cellphones and possibly cellphone services.

There was also a display of vibrators (uh, personal massagers) in the middle of the room as well.

I guess they know how to get their battery sales up.

[The Antiyuppie]

“the population of the country barely has any capability to understand the purpose of circuit boards, diodes or capacitors let alone how to design a circuit to utilize them.”

Not all of them...but I feel that the percentage of capable young people is much smaller in propotion to “the rest” than it was even 20 years ago.

I buy most of my geek parts from China these days, and they are making original, creative sruff, stuff that clearly was never “invented here first”, and yes, it hurts for me to write this.