RadioShack loss widens to $98 million; 200 stores to shutter
Fort Worth, Texas — RadioShack Corp. reported a widening net loss in the first quarter of its fiscal year 2015. The troubled retailer also confirmed plans to close up to 200 stores, based on location, area demographics, lease life and financial performance.
The retailer reported a net loss of $98.3 million, up from $28 million in the same quarter the prior fiscal year.
Net sales dropped 13% to $736.7 million from $848.4 million. RadioShack attributed its generally poor performance to factors including soft mobility sales, aggressive price competition, lower store traffic and higher expenses.
“Overall, our first quarter performance was challenged by an industry-wide decline in consumer electronics and a soft mobility market which impacted traffic trends throughout the quarter,” said Joseph D. Magnacca, CEO. “In particular, our mobility business was weak due to lackluster consumer interest in the current handset assortment and increased promotional activities across the industry including the wireless carriers. This resulted in disappointing sales and gross margin performance."
On a more positive note, Magnacca said the chain’s new concept stores continue to drive strong sales growth, and it has begun to execute a 100-store remodel program to scale the successful components of the format across its network.
"We are also successfully reducing our costs, with a particular focus on removing expenses that do not impact the customer experience, and have taken steps to lower our corporate headcount, leverage technology, and reduce discretionary expenses,” he said. “Our entire team is focused on executing our vision, adapting to the environment, managing our balance sheet, and driving sustainable change."
Report: Chico’s considers going private
Fort Myers, Fla. — Chico’s FAS Inc. is reportedly considering taking itself private. According to Financial Times, the women’s apparel retailer has been holding talks with several private equity firms in recent weeks.
While sources indicated Chico’s has been having conversations about going private, they have not clarified whether the retailer would go into partnership with a private equity investor or simply sell the business to a private interest. Chico’s current market value is $2.36 billion, and experts believe the company could get about 30% of that figure, or roughly $700 million, if it went private.
Abercrombie taps exec from U.K. retailer Next as brand president
New Albany, Ohio — Abercrombie & Fitch Co. has named Christos Angelides president of its Abercrombie & Fitch and Abercrombie Kids brands, a position he is expected to take in October 2014. Angelides, 51, will report to A&F CEO Mike Jeffries and will have overall responsibility for all product and customer-facing activities for the Abercrombie & Fitch and Abercrombie Kids brands.
He will also be accountable for the financial performance of the brands.
Angelides has spent his entire career with Next plc, a British fashion retail and Internet chain where he has most recently served as group product director since August 2000. Angelides, who is also a member of Next`s board of directors, has management responsibility for all product functions.
Prior to being named group product director, Angelides held a number of senior management roles, and he serves as chairman of Next Sourcing Limited and non-executive director of Lipsy, a young women`s fashion brand owned by Next.
"We are excited to welcome Christos to the Abercrombie & Fitch team and to deepen our bench of senior leadership talent,” said Jeffries. “Christos brings 28 years of experience working with a multi-billion dollar international retailer. His experience with all aspects of running a business made him the perfect candidate for this newly created role. Christos` appointment is a critical step in our long-term strategy of being organized to win and we are excited to welcome him to the Abercrombie team."