RadioShack to Close About 500 Stores Within Months [View all]
Source: Wall Street Journal
On Sunday, RadioShack Corp. RSH -4.84% used comedy, in the form of a Super Bowl ad, to show its stores being dismantled and rebuilt. On Tuesday, the news broke that some of the stores will be dismantled, period.
According to people familiar with the matter, RadioShack is planning to close around 500 locations in the coming months. It isn't clear which of RadioShack's roughly 4,300 stores will be closed and when exactly the closings will begin. The people familiar with the matter noted that it isn't unusual for companies to close stores when going through a restructuring.
The news was a cold dose of reality after the upbeat feeling generated by the commercial, which was widely considered one of the best that aired during the big game Sunday night. In the commercial, RadioShack poked fun at its outdated image by bringing in a crowd of throwback characters from the 1980s, including Hulk Hogan, Erik Estrada and Alf, who purport to want their store back and proceed to tear out the shelves and haul away products.
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The Fort Worth, Texas, retail chain has been working on transforming its image from an old-school electronics store into a destination for shoppers looking for entertainment gadgets, like headphones and smartphone cases. In October, RadioShack secured $835 million in loans to refinance about $625 million of debt. Those funds, from a group led by GE Capital, also freed up cash for RadioShack's overhaul.
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