Can RadioShack be saved?
The struggling electronics retailer reported dismal results for its latest quarter Thursday. But RadioShack’s CEO touted success during the Thanksgiving weekend and announced plans to slash costs to help get it back on track.
RadioShack ( reported a net loss of $161 million, larger than expected. Sales plunged 16% from a year ago to $650 million, which was also below Wall Street’s forecasts. )
The company also said that it finished the quarter, which ended on November 1, with just $62.6 million in cash and available credit. RadioShack has $841.5 million in debt. A quarter ago, the company had $182.5 million in liquidity and debt of $658 million.
That is bad news, especially since the company is currently involved in a dispute with a top creditor about whether or not it has violated the terms of its credit agreement.
RadioShack has struggled to compete with larger rival Best Buy ( and also faces stiff competition from mass merchandise retailers )Walmart ( and )Target (as well as online shopping king )Amazon (Tech30). ,
Despite efforts to remodel the company’s stores and add fresher products like 3-D printers, drones and wearable cameras, the company is still viewed by many consumers as being a retail relic from several decades ago.
Related: RadioShack still stuck in the 1980s
But CEO Joseph Magnacca remains hopeful that the company’s fortunes will improve. He said that same-store sales on Thanksgiving, Black Friday and the Saturday after that were up sharply from a year ago. However, mobility sales — think smartphones and other wireless devices — plunged sharply.
Magnacca conceded that the cell phone business is a problem that needs to be fixed. He also outlined a plan to cut costs by $400 million next year through some store closures and lower marketing expenses.
However, it may be too little too late considering how troubled the company’s balance sheet is. The company’s bonds are rated as junk.
Shares of RadioShack are trading for only about 55 cents. They hit a peak of nearly $80 in late 1999 — the height of the last tech boom.