RadioShack (Fort Worth, Texas) announced that it will close hundreds of stores and two distribution centers in Southaven, Miss., and Charleston, S.C. The company's profits fell 62% in the fourth quarter of last year, from a net income of $130.9 million in 2004 to $49.5 million in 2005. The company’s turnaround plan will shut down 400 to 700 company-owned stores.
"RadioShack failed to achieve its financial objectives in 2005," said CEO David Edmondson in the company's year-end news release. "We implemented several key changes including executive management, advertising, and store operations, but we must move at a much faster pace with a greater sense of urgency, and that is what necessitates our turnaround plan."
The 18-month plan includes replacing older, slower moving merchandise and improving and investing in top-performing stores. The company also plans to align overhead costs to extract more profit per square foot.