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:
http://www.theburningplatform.com/?p=42832
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.
http://finance.yahoo.com/news/radioshack-reports-financial-results-fourth-113000002.html
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.
One of the stores near me, in a prominent mall space, closed last month.
Doesn’t bode well for commercial retail space, either. Class A offices are still going up. Someone has to service the feds, at least until the end of the month.
Speaking of which, does anyone seriously think the federal bureaucracy can be saved? Apparently, McCain doesn’t think so either, he’s only monkeying for less cuts to the military.
I predict the shock to the economy of ANY cuts in spending will overshadow ANY discussion of gun control. Or perhaps, the markets will react favorably to actual cuts being enacted, even it’s only symbolic.
Regardless, the feds have gone over the cliff, it’s only a matter of time before the ground rushes up to meet them.
Maybe the feds can bail out RS.
Coming soon to a mall near you
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Ahhhh, basking in the golden glow of total and complete vindication are we????
Actually, I am very sad at this news. Radio Shack (and Tractor Supply) are the only two stores I will actually go to and poke around in even if I have nothing I really need to buy. I have yet to find a Radio Shack without helpful employees that really know their stuff.
I have gotten thousands of dollars of free electronics training there, mebbe that is one reason they are going broke.
Sad.
I needed some pressure transducers to repair some stuff in the shop and called the local shack. They did not have the parts in stock and to order them i would have to come to the store as they would not take a credit card over the phone.
I ordered it on radioshack.com and when they asked me for feedback i said.
YOU NEED TO CLOSE ALL YOUR RETAIL STORES AND BECOME AN ETAILER
So now once a day I get a radio shack bomb in my email on the special chineese POS for sale today.
By the way the transducer repaired a $700 vacuum gage assembly on our AC recovery machine. With shipping is was 12 bucks for 4 of them
It occurs to me that Obama’s stimulative gun-buying program is probably working to keep the negative growth rates out of the BLS. Suh-weet!
First we had the “flu epidemic” in which every government-paid moron and entertainment industry “newscaster” were warning us EVERYDAY about the HORRIFIC flu numbers in January. Which used up a ton of non-selling vaccines AND bumped Jan retail sales. Then the tragedy turned into excuse.
What’s next?
What great thing can be pulled from our asses to cover up reality for a while longer?
Whom cares. Radio Shack is failing because they consistently refuse to identify their primary customers and market to/for them.
Their ads are always trying to entice the likes of the average housewife, or cheerleader, into the stores. Those people are NOT, and NEVER will be RadioShack’s primary customers.
About five years ago my son and I came up with a bunch of marketing plans that would have worked to increase their sales to their primary demographic (which are techies/inventors /repair types).
They have tried nothing that we came up with and continued to try and market to the wrong crowd.
Wonder how many millions they have wasted trying to lure people that DON’T WANT TO shop in their stores, into their stores?
Side note, my cordless phones at the shop needed new batteries, I went online and RS online had them. I took down THEIR part number and while in the area stopped by a store. The clerks could NOT find the battery by the RS part number – they wanted the part number off the battery which would change by manufacturer.
I showed them on their own terminal the part. The only thing they could do was order the battery and in about a week I could come back to the store and pay for it – and shipping.
This is not the first time I have left their store without spending my money even when their company allegedly HAD THE ITEMS to sell me.
Went back online, ordered it online from another e-tailer and received it for $3 shipping in 3 days.
Bye, bye RadioShack. Nice to know you.
Every cheap Chinese part at Radio Shack can be bought online from Amazon or Newegg for more than half off and usually with free shipping. If U order it straight from a Chinese seller it takes forever, but U can buy for even less than the US reseller/middleman. How they’ve stayed in business for so long is a mystery.
With the Shacks new leadership, I see a clean-up and a sale to Best Buy.
They have at least 5 new, obnoxiously brightly lit stores in the rapidly growing 3rd world city where I live.
I never see anyone in them.
Maybe they’re laundering coke money, as empty high-end stores here are rumored to do? Not that the Shack is high end.