RadioShack Closing Stores, Not Even The Eighties Want Them Back [Video]

RadioShack is closing stores nationwide, just a month after they became relevant again through their fantastic Super Bowl commercial. Due to a rough fiscal year, including an abysmal fourth quarter, the electronics retailer is set to close as many as 1,100 store across the United States. What happened?

RadioShack is closing their stores in an effort to run the business more efficiently. Currently, there are more than 4,000 RadioShack locations. That is more than Best Buy, Target, or HH Greg. Considering that the 93 year old electronic retailer is not even touching the sales numbers of the larger competitors, closing down store is inevitable.

RadioShack Chief Executive Joe Magnacca came onboard in February of 2013. He had previously been CEO over Walgreens and it was hoped that he could revive a sinking ship. The company was originally started as a niche market, selling parts for amateur radio builders. Started by brothers Theodore and Milton Deutschmann in 1921, RadioShack enjoyed growing popularity through the 1980s. With the rise of the personal computer in the 1990’s the tide began to change.

Over the last decade the onslaught of smartphones, tablets, computers, and every imaginable accessory for those devices have been released at blinding speeds. RadioShack is now closing stores because they have been unable to keep up with the competition. Especially as buying power moves to an increasingly online marketplace, the smaller stores like RadioShack have little hope of keeping up.

Some believe that the company may be going the way of Circuit City. Once considered to be Best Buy’s biggest competitor, Circuit City had to file bankruptcy in 2008 after they were stretched too thin with not enough sales. Market analyst David Strasser said of RadioShack’s recent press release:

Unfortunately, the press release reads somewhat like the Circuit City press releases of 2008, before they filed (for bankruptcy) in November 2008. Circuit City talked of some wins, and other positives including store remodels, but the results were overwhelmed by a broader economic malaise, and lost market share, that delivered the business to an extent that was not recoverable.

Magnacca’s strategy to turn RadioShack around primarily involved a change in image. The new stores featured in their commercials and opening up feature a very minimalist design (think Apple store). Instead of selling a wide range of products from multiple competitors, they have tried to zero in on just a few products from limited suppliers. Unfortunately, this has produced minimal success as well. Although the company is trying to remain positive, things do not look good for the company to make it to 100 years.

Do you think RadioShack closing their stores signals the end for the store or can they turn it around?

[Image via Northfoto/Shutterstock.com]