Here I go again. I wrote two previous articles about the downward spiral of Radioshack in October and September of last year, and its ultimate meeting with bankruptcy court. Here is a link:
They didn’t disappoint with their 4th quarter results. They were absolutely horrific and confirm everything I’ve written before. Here is a link to their report.
I’ll summarize the gory details for you:
- They generated a massive $63.3 million loss during what is supposed to be their best quarter of the year, after making a profit of $11.9 million last year.
- Their annual loss was $139.4 million, after making a profit of $72.2 million in the prior year.
- Fourth quarter comparable store sales plunged by 7% in the 4th quarter.
- Sales for the year declined by 3%, but their inventory grew by 22%. This is a DEADLY combination for a retailer.
- Their accounts receivable surged by 18%, indicating that the little sales they are generating is on large doses of credit to their customers.
- They had a negative cashflow of $137 million for the year.
- They have $288 million of debt due within the next year. Their cash position should get them through one more year, but if their suppliers get worried the jig could be up.
Radioshack operates 7,000 locations and employs 34,000 people. Their only chance at survival is to close their 30% worst performing stores immediately. Retail CEOs rarely have the wisdom and reality based thinking to do what needs to be done. Time will tell, but this is just another dead retailer walking.