Radio Shack on Tuesday announced the closure of 1,100 under-performing stores in the U.S. The announcement comes on the heels of a poor last quarter performance.
Though it was not known when the stores would be closed, Radio Shack said in a release that it would continue to have a strong presence with 4,000 stores post the closure.
"Our focus on the brand, our operations, and the in-store experience has been unfolding in parallel with a strategic review of our store footprint. Over the past few months, we have undertaken a comprehensive review of our portfolio from many angles - location, area demographics, lease life and financial performance - in order to consolidate our store base into fewer locations while maintaining a strong presence in each market," said Joseph C. Magnacca, chief executive officer in the release.
"The result of that review is our plan to close up to 1,100 under-performing stores. We will continue to have a strong, unmatched presence across the U.S. with over 4,000 stores including over 900 dealer franchise locations," he added.
The announcement came on a day when Radio Shack declared that its fourth quarter earnings for 2013 stood at $935 million, down from $1.2 billion in 2012, CNET reported. The NYSE listed company announced an annual loss of $400.2 million or 3.97 per diluted share up from 2012's $139.4 million.
Though Magnacca exuded confidence when he said Radio Shack was ready with a path to profitability, ripples were clearly seen in the stock performance. According to Yahoo's reporting, the announcement caused the stock to tumble by more than 24 percent in Tuesday's pre-market trading.
"Without minimizing the challenges ahead, we have a detailed strategic path to profitability based upon the five pillars of our turnaround. Our entire team is focused on execution as we work to improve our performance in the coming year," Magnacca said in the release.
