Radio Shack plans to close 500 stores during their rebrand.
The Wall Street Journal reported on Tuesday that the electronics retailer RadioShack will soon close approximately 500 of its nearly 4,500 stores while advisers restructure the company’s image. Although the Journal’s Suzanne Vranica says people familiar with the process did not reveal exactly which stores will close, the shuttering of doors is reportedly not unheard of during company transformations such as this.
Much of the public became aware of RadioShack’s plan to polish its image after seeing its Super Bowl commercial in which several 1980’s-era figures raid a retail store after a clerk exclaims, “The 80s called. They want their store back.” During the raid, figures such as Hulk Hogan, Erik Estrada, and Alf steal the store’s merchandise, leaving its shelves bare.
Vranica says RadioShack obtained $835 million in October from a GE Capital group. The money, originally used to refinance $625 million in debt, will help the company work through the restructuring process. Overall, the retailer reportedly is working toward becoming a destination for entertainment gadgets.
RadioShack’s commercial ends with a quick display of a future retail location with stereo headphones, smartphones, and televisions on display. One customer appears to use his smartphone to turn on a desk lamp.
According to Jayne O’Donnell at USA Today, holiday sales in 2013 displayed mixed results for many retailers across the country. She says that, although the National Retail Federation reported an increase in last year’s retail sales by 3.8 percent in November and December (excluding automobile, gas station, and restaurant sales), Retail Metrics President Ken Perkins said 25 of 29 retailers showed holiday losses during a recent study by his stock analysis company. He said sales were negatively affected by a shorter shopping season, significant discounts, and less must-have items.
With all these factors in play, Vranica says, the competition during the season may have lessened RadioShack’s expected amount of foot traffic and revenue. She says John W. Feray will begin working this week as the company’s new CFO, replacing interim CFO Holly Etlin who will continue to work with the company to develop its new image.
Image courtesy of Davidcaballero864 via Wikimedia Commons
