UNDATED - RadioShack plans to close 400-700 stores, but there's no word yet on whether the Gainesville store will be one of them.
A person who answered the phone at the store Monday said the manager was out and referred all questions to company headquarters. A spokesman there says no announcement will be made for at least eight weeks.
Plans to close the stores as well as two distribution centers are part of a move by the electronics retailer to improve its financial performance after fourth-quarter earnings dropped 62 percent.
"We must close underperforming, low-volume stores that are draining resources of the company," said president and chief executive Dave Edmondson. "We will be vigilant with costs and improve performance in a very sustainable way."
The company said it could not project the number of job cuts until it identifies all the affected stores, but 88 employees will be affected from the distribution center closings in Charleston, S.C., and Southhaven, Miss.
RadioShack said the stores it plans to close are company-operated. There are nearly 7,000 RadioShack stores operated by the company or dealers, and more than 700 wireless kiosks. It also has more than 100 stores in Mexico.
The profit decline disclosed last week reflected a $62 million writedown in the value of its inventory, higher promotional expenses and a merchandise shift.
RadioShack 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 affect 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," Edmondson said in a statement. "In addition, wireless sales and profits were below our expectations."
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 Chief Financial Officer David Barnes told analysts the decline in profit came from inventory writedowns and cellular phone equipment sold at a loss.
"Some aspects are easy to quantify, some are not," Barnes said. "What I can't quantify is the impact of the wireless transition on our sales due to fact that we have less inventory and less active promotional activity."
(The Associated Press contributed to this story.)
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September 20th, 2024
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