The only question now is whether RadioShack declares bankruptcy before Christmas or shortly thereafter. The fat lady is singing and there will be thousands of Space Available signs coming to malls near you.
RadioShack again denies defaulting on loan
By Chelsey Dulaney
Published: Dec 8, 2014 7:29 a.m. ET
RadioShack Corp. on Monday again denied that it has defaulted on a loan from its term lenders, less than a week after the struggling electronics chain initially disputed the allegations as “wrong and self-serving.”
The lenders–Salus Capital Partners and Cerberus Capital Management–a year ago provided a $250 million lifeline that helped keep RadioShack in business. They now say RadioShack RSH, +0.00% defaulted on the loan when it secured a separate credit line in October.
The default claim follows the lenders’ efforts to block RadioShack’s plan to close up to a quarter of its roughly 4,300 U.S. outlets and free up about $200 million in costs.
RadioShack on Monday said it doesn’t believe the lenders’ demand for immediate payment has any merit. The company also said that the amount of revolving loan commitments remains $535 million.
The spat is the last thing RadioShack needs as it tries to sell enough headphones, speakers and other electronic gizmos to make it through to January, when a further recapitalization is due to happen. It comes in the middle of the critical holiday selling period, when retailers generate up to a fifth of their annual revenue.
Can someone name any Cereberus success investments from the past 6/7 years?
Seems the Chrysler “Investment” wasn’t the only insanity.
It has always amazed me the companies – both small and gargantuan – that have no real clue where their business comes from, nor how to appeal to those customers.
RadioShack, Sears, Kmart, Frank’s Nursery, Highland Appliance, the list grows and grows.
Bye-bye RS, you coulda been amazing but chose the “easy” money and lost it all.
Bye-bye more ‘murkin jobs. I’m sure the BLS is busy creating models to add back in the shuttered conglomerates employees to their reports. After all these are “anomalies” so shouldn’t be reported.
I think I have that right, but what do I know? I’m not a paid-for-life, statistician, paid to produce fancy toilet paper and assist in the cover up the destruction of my children’s futures.
Even CEO Can’t Figure Out How RadioShack Still In Business
FORT WORTH, TX—Despite having been on the job for nine months, RadioShack CEO Julian Day said Monday that he still has “no idea” how the home electronics store manages to stay open.
“There must be some sort of business model that enables this company to make money, but I’ll be damned if I know what it is,” Day said. “You wouldn’t think that people still buy enough strobe lights and extension cords to support an entire nationwide chain, but I guess they must, or I wouldn’t have this desk to sit behind all day.”
The retail outlet boasts more than 6,000 locations in the United States, and is known best for its wall-sized displays of obscure-looking analog electronics components and its notoriously desperate, high-pressure sales staff. Nevertheless, it ranks as a Fortune 500 company, with gross revenues of over $4.5 billion and fiscal quarter earnings averaging tens of millions of dollars.
“Have you even been inside of a RadioShack recently?” Day asked. “Just walking into the place makes you feel vaguely depressed and alienated. Maybe our customers are at the mall anyway and don’t feel like driving to Best Buy? I suppose that’s possible, but still, it’s just…weird.”
A RadioShack store that somehow manages to bring in enough paying customers to turn a profit.
After taking over as CEO, Day ordered a comprehensive, top-down review of RadioShack’s administrative operations, inventory and purchasing, suppliers, demographics, and marketing strategies. He has also diligently pored over weekly budget reports, met with investors, taken numerous conference calls with regional managers about “circulars or flyers or something,” and even spent hours playing with the company’s “baffling” 200-In-One electronics kit. Yet so far none of these things have helped Day understand the moribund company’s apparent allure.
“Even the name ‘RadioShack’—can you imagine two less appealing words placed next to one another?” Day said. “What is that, some kind of World War II terminology? Are ham radio operators still around, even? Aren’t we in the digital age?”
“Well, our customers are out there somewhere, and thank God they are,” Day added.
One of Day’s theories about RadioShack’s continued solvency involves wedding DJs, emergency cord replacement, and off-brand wireless telephones. Another theory entails countless RadioShack gift cards that sit unredeemed in their recipients’ wallets. Day has even conjectured that the store is “still coasting on” an enormous fortune made from remote-control toy cars in the mid-1970s.
Day admitted, however, that none of these theories seems particularly plausible.
“I once went into a RadioShack location incognito in order to gauge customer service,” Day said. “It was about as inviting as a visit to the DMV. For the life of me, I couldn’t see anything I wanted to buy. Finally, I figured I’d pick up some Enercell AA batteries, though truthfully they’re not appreciably cheaper than the name brands.”
“I know one thing,” Day continued. “If Sony and JVC start including gold-tipped cable cords with their products, we’re screwed.”
In the cover letter to his December 2006 report to investors, “Radio Shack: Still Here In The 21st Century,” Day wrote that he had no reason to believe that the coming year would not be every bit as good as years past, provided that people kept on doing things much the same way they always had.
Despite this cheerful boosterism, Day admitted that nothing has changed during his tenure and he doesn’t exactly know what he can do to improve the chain.
“I’d like to capitalize on the store’s strong points, but I honestly don’t know what they are,” Day said. “Every location is full of bizarre adapters, random chargers, and old boom boxes, and some sales guy is constantly hovering over you. It’s like walking into your grandpa’s basement. You always expect to see something cool, but it never delivers.”
Added Day: “I may never know the answer. No matter how many times I punch the sales figures into this crappy Tandy desk calculator, it just doesn’t add up.”
http://www.theonion.com/articles/even-ceo-cant-figure-out-how-radioshack-still-in-b,2190/
I still have my heathkit stereo, purchased kit from the shack and built it myself when I was nine. Getting hard to find tubes anymore. You used to be able to walk in and buy resistors or a capacitor, but those days are long gone in favor of phones, which seems to be all they carry anymore.
I am with Radio Shack always, even to the very end of the age. As long as I live, Radio Shack will prosper. Mr. Quinn is a false prophet whom you should banish. Invest one dollar in RS today and it will return to you tenfold, fifty-fold, and yea, even a hundred-fold.
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Everything Radio Shack relied on for sales, is now in a smaller more convenient form.
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I must admit, that while I will not shed a tear for Sears or Pennies or A&F when they finally bite it, I will miss my neighborhood Radio Shack.
It’s right by the el stop, and it’s a handy place to get stuff like cell phone chargers, nickel metal hydride batteries, headphones, replacement headphone jacks, and other small electronic gizmos. I got a very nice deal there recently, 50% off on an extremely nice Cannon camera with a telephoto lens. The help in this store are always informed and helpful, never pushy.
Shame.
At least McDonalds is booming.
McDonalds Implodes, Reports Worst US Sales In Over A Decade
Submitted by Tyler Durden on 12/08/2014 09:19 -0500
If one ignores all traditional, staple indicators of a growing economy, such as stable (not plummeting) crude demand, stable (not plummeting) holiday spending and stable (not plummeting) McDonalds comp store sales, then indeed the US economy has “decoupled” from the rest of the world, and those who wish to demonstrate the same intellectual capacity as Tim Geithner, will welcome you to the (latest non-)recovery.
And yet for those, who are leery of seasonally-adjusted government data (showing soaring low-wage jobs offset by crashing employment in the energy sector and M&A synergies which mysteriously are never captured), or sentiment surveys and confidence polls (of Wall Street executives and government workers), here is the latest data from McDonalds. Showing the worst US comp store sales in nearly 12 years at -4.6%, one does wonder if following America’s inability to even pay for sub-$1 meals, mass starvation will follow?
I mean Penny’s, for Chrissakes.
“The fat lady is singing and there will be thousands of Space Available signs coming to malls near you.”
Reminds me of the SNL skits where all the stores in the malls were closing and the only store making any money was the Scotch Tape store selling tape to tape up Going Out Of Business signs.
These were once great American companies and you all are filled with joy that they are going down the toilet.May the gods of hell fire strike you with the boils of Egypt.
Weird Al better cash his checks for doing their Christmas ads before they file.
Sears used to really be something with those big catalogs everyone used to have. I keep looking at the 1908 reprint and its amazing how many things you could buy.And how so many things that we have now were available back then.
But looking around the web and the news at night. Hardly a peep about any problems out there.
Kohls,pricey place with an empty parking lot.I don’t know how they stay in business either.
Everyone is broke. No leadership coming from Washington. No confidence. Doom time!
RadioShack unveils cost-cutting plans, loss widens
By Chelsey Dulaney
Published: Dec 11, 2014 7:50 a.m. ET
RadioShack Corp. on Thursday outlined cost-cutting efforts to boost its earnings by more than $400 million a year, as the struggling electronics chain works to shore up its finances and fight back against lenders who say it has defaulted on a loan.
RadioShack also reported its loss widened in its November quarter, missing Wall Street expectations, as sales plunged.
Chief Executive Joseph C. Magnacca said the cost-cutting efforts include reductions to its headquarters, field, stores, and store support to “right-size our business.”
The steepest cuts are expected to its marketing efforts, totaling $105 million, and its store operations and regional management, where the retailer expects to cut $100 million, according to a presentation posted on the company’s website. RadioShack also hopes to save $90 million through store closures, and smaller amounts through cutting corporate, professional and store costs.
RadioShack had initially hoped to close up to a quarter of its roughly 4,300 U.S. outlets, freeing up about $200 million in costs, but the plans were blocked by its lenders.
RadioShack in recent weeks has publicly disputed claims from the term lenders, Salus Capital Partners and Cerberus Capital Management, who a year ago provided a $250 million lifeline that helped keep the company in business. The lenders now say that a credit line RadioShack secured in October caused it to default on the loan.
In October, RadioShack appeared to have bought more breathing room after warning that its depleted cash position could force it to seek bankruptcy protection. RadioShack lined up a rescue package led by hedge fund Standard General LP that gave the company $120 million for use as collateral to pay its bills during the holidays.
For the period ended Nov. 1, RadioShack reported a loss of $161.1 million, or $1.58 a share, compared with a year-earlier loss of $135.9 million, or $1.35 a share. Excluding one-time items, the company posted a loss of $1.23 a share.
Sales at stores open at least a year dropped 13%, pushing the company’s overall revenue down 16% to $650.2 million.
Analysts polled by Thomson Reuters expected a per-share loss of $1.04 and revenue of $717 million.
Once a go-to destination for electronic gadgetry, RadioShack has struggled for years with heightened competition from websites and low-cost rivals. Shoppers are bypassing the chain, and its mobile-phone business is suffering, challenges RadioShack said may not let up this year.
Mr. Magnacca on Thursday said RadioShack is looking to drive growth through its retail stores, citing 35% growth in same-store sales in its U.S. corporate stores over the three-day Thanksgiving holiday. Mobility same-store sales fell 27% in the same period.
“It is notable that our core retail efforts are working, even as our mobility category is still experiencing challenges,” he said.
RadioShack ended the quarter with $62.6 million in liquidity, including $43.3 million in cash and cash equivalents. The company’s debt was $841.5 million.
RadioShack has a ‘high likelihood’ of bankruptcy filing — Fitch
RadioShack doesn’t have material sources of liquidity beyond its revolver — Fitch
RadioShack’s liquidity ‘is severely strained’ — Fitch