Fort Worth, Texas — RadioShack’s planned closure of upward of 1,100 stores is on hold.
The action, which could have shuttered a quarter of the chain’s store base, requires the approval of its lenders, principally Salus Capital Partners and GE Capital.
But RadioShack said in an SEC filing yesterday that it finds their consent terms unacceptable, and will proceed with its own plan to close a smaller number of stores and pursue other cost-cutting measures as permitted under its credit agreements.
Last month the Wall Street Journal placed the number of store closures allowable without lender approval at 200. It also cited unnamed sources who described the negotiations as strained, with some lenders peeved by RadioShack’s public disclosure of the massive store-closure plan.
CEO Joe Magnacca said closing 1,000-plus underperforming stores would still leave the chain with “a strong presence in each market” and more than 4,000 locations, including about 900 franchised shops.
His call for rationalizing RadioShack’s real estate follows a disappointing holiday season in which net sales fell 20 percent and comps sank 19 percent for the fourth quarter, ended Dec. 31.