RadioShack to Close Distribution Centers

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.

Source: RadioShack.

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