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Radio Shack reports larger Q4 loss due to weakness in phone and tablet sales; 1100 stores to close

Posted: , by Alan F.

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Radio Shack reports larger Q4 loss due to weakness in phone and tablet sales; 1100 stores to close
Electronics retailer Radio Shack, which has focused on smartphone and tablet sales more heavily over the last few years, is closing 1100 "underperforming" stores. The announcement was made following the release of the company's fourth quarter earnings report which showed a loss of $191.4 million for the holiday period. That was a larger loss than the $63.3 million the company lost in 2012 during the same three month period. Among the reasons for the larger spill of red ink last year, CEO Joseph C. Magnacca blamed a "soft mobility market".

After accounting for the shuttered locations, Radio Shack will still have over 4000 stores running from coast to coast. That figure includes 900 franchised locations.

Half of Radio Shack's revenues come from sales of smartphones and tablets. Net sales for the fourth quarter amounted to $935.4 million, compared to $1.2 billion rung up in the previous year. Comparable store sales were down 19%, due to lower traffic inside stores and the weakness in mobility sales. CEO Magnacca also blamed operational issues for Radio Shack's poor financial performance.

Among Radio Shack's competitors, Best Buy had a leading 13% share of mobile phone sales in the U.S.according to a November 2013 survey from CIRP. Apple was second with 11%. Big box stores like Target, Walmart and Costco combined for a 12% piece of the mobile pie last year, while Amazon accounted for 7%. Ebay was last among the names listed, accounting for 2% of handset sales. This means that Radio Shack's share of the mobile phone market was less than 2% last year.

source: WSJ via FierceWireless

18 Comments
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posted on 04 Mar 2014, 13:35

1. Planterz (Posts: 994; Member since: 30 Apr 2012)


http://www.theonion.com/articles/even-ceo-cant-figure-out-how-radioshack-still-in-b,2190/?utm_source=Facebook&utm_medium=SocialMarketing&utm_campaign=LinkPreview:NA:InFocus

posted on 04 Mar 2014, 13:37 1

2. Mxyzptlk (Posts: 4019; Member since: 21 Apr 2012)


Ladies and gentlemen, please stay close as we enter the museum filled with lost relics of the past

*walks into the mall*

Exhibit #A, we have here an old, musty smelling store with DIY electronics and overpriced goodies that no one will buy.

All joking aside, I am surprised they have kicked the bucket like another overpriced electronics store did, Circuity City.

Now for Bust Buy.

posted on 04 Mar 2014, 13:50

3. wrm2013 (Posts: 187; Member since: 28 Mar 2013)


You can say and spin however you want but technology has and will continue to kill jobs. Skynet will one day be a reality.

posted on 04 Mar 2014, 14:05 1

4. Planterz (Posts: 994; Member since: 30 Apr 2012)


Remember when you could walk in to a Radio Shack, and buy radios? And parts for radios? And other electronic components? I do, but I'm over 30, and those memories are of a nostalgic youth.

People don't go to Radio Shack to buy phones. If they know better, they buy them online from Amazon or other vendor because you can almost always get them cheaper online. If they don't know better, they go to Best Buy, and if they're truly clueless, they go to their provider's retail outlet to buy a device, or the mall.

People don't associate Radio Shack with cell phones - or at least, I don't. The last few times in several years I stepped in to a RS was to look for a specific cable or adapter so I woudln't have to order it off eBay or Amazon and wait a few days or many if it came from China, and they didn't even have those in stock. Of course, they could order them, and charge 2-5X as much + shipping + tax.

posted on 05 Mar 2014, 13:29

18. JunitoNH (Posts: 964; Member since: 15 Feb 2012)


Great observation. RS gets it from both ends. If you want phones, you buy elsewhere, and if you want certain, specialize electronics such as amp, volt meters, you buy at HOME DEPOT. Reality is, they are antiquated and overpriced.

posted on 04 Mar 2014, 14:16 2

5. johnbftl (Posts: 220; Member since: 09 Jun 2012)


When I was hired at Radioshack when I was 18 I had to read a big book on parts and accessories, then pass a 100 question test just to get on the sales floor. We also had to know how to do basic things like soldering, wire stripping, and crimping. Now any idiot can be thrown in there as a manager and know nothing about components. This is why the company is going under. They've gone away from what separated them from the big box stores. More knowledgeable associates and parts that do it yourselfers need.

posted on 04 Mar 2014, 15:20

6. Mr.Mr.Upgrade (Posts: 425; Member since: 30 Aug 2011)


Best buy sales everything they don't need phones to make money, radio shack has no deals no price match, GameStop will be next, buy a game for 60 and trade it in a week later they give u 10 bucks, smh what a joke

posted on 04 Mar 2014, 16:13 1

7. cripton805 (Posts: 972; Member since: 18 Mar 2012)


Nobody is forcing you to trade in, and they dont know how long theyre going to have to sit on that one used game they gave you $22 trade in for. Games lose their value, so if you bought Battlefield on release, you could probably find it $10-$20 cheaper in a couple of weeks. They cant give you any more or they will lose money. Same thing for consoles. They expect a console to function and there are countless people trying to sell them broken consoles. They have to have profit somewhere in the trade in process. It costs momey to store everything.

posted on 04 Mar 2014, 17:42

10. downphoenix (Posts: 2378; Member since: 19 Jun 2010)


That is something people often don't understand. And Gamestop actually offers some of the best trade values, if you dont like what they offer, take a look at the trade offers that Best Buy and Amazon have, it will get you running to a Gamestop (or at least try to get more by selling on Ebay or Craigslist). Thing is, some games that they give a quarter or less for... they tend to be really old games that nobody wants anymore and a bunch of other people trade in.

posted on 04 Mar 2014, 16:22

8. Sauce (unregistered)


Thats what happens when you sell WP
LooooooL

posted on 04 Mar 2014, 17:45

11. downphoenix (Posts: 2378; Member since: 19 Jun 2010)


so by that logic, every cellular retailer other than Apple stores should be doing poorly, and Microsoft stores should be in the gutter instead of opening new locations.

posted on 04 Mar 2014, 18:18

13. Sauce (unregistered)


It was a joke. So many serious fanboys here.

posted on 04 Mar 2014, 17:12

9. mike2959 (Posts: 263; Member since: 08 Oct 2011)


Here's what I don't get. The public perception is these companies like Radio Shack, Best Buy, Circuit City went south because the lack of customer service. As this someone posted above, he had to take a quiz, learn how to solder etc... Why does everyone give Amazon a free pass.. There is NO CUSTOMER SERVICE, nobody to ask questions, and don't tell me about the return policy, it's a pain in the ass. See the general public is made up of self righteous, I want it for the Amazon price but I want knowledgeable service people at my beckoning call. The AMERICAN PUBLIC PUT THESE COMPANIES OUT OF BUSINESS.

posted on 04 Mar 2014, 17:50

12. downphoenix (Posts: 2378; Member since: 19 Jun 2010)


I have had to deal with amazon customer service a couple of times, and it was positive in both regards, once was for a return, and once was for a amazon prime cancellation. At least they aren't Google, you cant even get a hold of a live person for anything related to Google, it is as backwards and asinine as humanly possible, they are so cheap they wont even do outsourced call centers, much less actual americans.

posted on 04 Mar 2014, 20:28 1

14. Agamemnon050 (Posts: 1; Member since: 04 Mar 2014)


Completely agree with you Mike. I shop Amazon almost religiously and outside of some returns or defects, customer service is AT BEST sub-par. I worked at RS a few years ago and it wasn't great but I shop there still and the service I receive is incredible. I have been told that it's the company's attempt at being that "mom and pop" company people used to know. Too little too late? Perhaps. People want both Customer Service and Fair pricing. It's almost impossible to have both. Companies like RS have gone through CEO's that have had their heads stuck up their a**. Now, they're headed in the right direction but it's like adding a band aid to the Titanic.
Oh... and to the person that said they don't price match... Stupid... I DID buy my last 2 phones at RS (1520 Lumia FTW and G2). BOTH were cheaper at RS than other places.
Nowadays people are Self Serving and filled with a sense of entitlement. Not happy if its not cheaper for better customer service.... and then unhappy if the Customer Service isn't the best for the sake of price.
What is killing RS and killed Circuit City and is slowly killing Best buy IS online. IS cheaper pricing over Customer Service.
Me, I'd rather spend a few extra bucks to have someone walk me through the A-Z's of something with a smile, rather than pay a lot less and hit my head against a wall trying to figure out how to do it myself.

posted on 05 Mar 2014, 08:27

16. jroc74 (Posts: 5192; Member since: 30 Dec 2010)


I agree. between Newegg, Tiger Direct, Cyber Power PC, Amazon.....I wouldnt have any reason to go to brick n motor stores for anything electronics related.

And I think Tiger Direct n Circuit City joined forces for online. Radio Shack was one of the few places I could physically walk into and get some obscure part for a PC, phone, etc.

posted on 05 Mar 2014, 08:23

15. jroc74 (Posts: 5192; Member since: 30 Dec 2010)


Sad like I was sad the day Circuit City went bye bye.

I had just got a credit promotion after buying something at CC...then the announcement. I hope the 6 months free Netflix deal is still honored with RS. See if I can get my kids mother to get a Moto G from there.

posted on 05 Mar 2014, 08:30

17. jroc74 (Posts: 5192; Member since: 30 Dec 2010)


Oh...see what happens when one doesnt read the article....its not all RS closing...but some.

I just assumed 1100 stores was a majority of their stores. I didnt realize there were that many stores.

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