Electronics retailer RadioShack Corp. (NYSE:RSH) will close about 500 stores in the coming months as the company continues to undergo restructuring, people familiar with the matter said on Tuesday.
The Wall Street Journal reported on Tuesday that details of when the planned closures will begin and which of RadioShack’s 4,500 stores will be closed are not clear, though closing some stores is not an unusual move during operational restructurings. However, executives last year suggested the company would resist downsizing its store footprint, according to WSJ.
But the fiercely competitive holiday shopping season, which eroded store margins for the entire retail sector while attracting little new foot traffic, appeared to have changed their mind.
The Fort Worth, Texas, electronics chain has been attempting to revamp its image from an old-school electronics store into a destination for high-tech shoppers. Its Super Bowl advertisement on Sunday poked fun in good nature at that very outdated image to positive reviews, prompting a 7 percent stock jump on Monday.
A group led by GE Capital rescued RadioShack in October by lending $835 million to the retailer to refinance its $625 million of debt, which also provided cash for the company’s overhaul, according to the Wall Street Journal.