RadioShack is dropping categories, closing stores and selling its headquarters in an effort to boost profitability.
The measures, for which the CE chain will take a $124 million charge in its fiscal fourth quarter, are designed to "strengthen the quality of its assets and enhance return on investment," RadioShack said.
The company will exit the "non-strategic" car stereo, pager, security system and commercial electronics parts categories in order to concentrate on its core accessories, batteries, parts and wireless businesses. RadioShack is also abandoning the commercial installation business, which proved unprofitable for the retailer, and will focus instead on the residential market.
RadioShack is also closing 35 under-performing stores, and, in a break from the company's usual business practice, will do so prior to the expiration of their leases.
The No. 5 CE chain, according to the TWICE Consumer Electronics Retail Registry, is also selling its corporate headquarters here. RadioShack will leaseback the office space until 2004, when it will move into a new headquarters facility that's also located in downtown Fort Worth. Charges will include a $45 million loss on the sale of its headquarters, $26 million to exit the various product categories, $8 million to shut the stores and $5 million to leave the commercial installation business.