Boston, MA 03/05/2014 (wallstreetpr) – The management of RadioShack Corporation (NYSE:RSH) feels that they tried to achieve a lot in too little time and that adversely affected their financial results. The company reported disappointing results some days back.
The causes for the decline:
RadioShack Corporation (NYSE:RSH) has identified several causes for the results, some of them are internal while some are external. Among the major external factors, fewer shopping days between Thanksgiving and Christmas badly affected its sales. This is also a major reason identified by several other retail chains for a bad holiday season sales. The season also did not support the traditional brick-and-mortar chains. Weather also played a spoilsport as severe cold weather kept away shoppers from the retail chains. This resulted in lower store traffic and lower sales revenues. Consumer electronics segment also saw significant promotional activities affecting profit margins. Though several new models were launched during this period, there were many sellers competing for consumers.
The internal factors:
RadioShack Corporation (NYSE:RSH) has admitted that these factors also affected other retail chains. Problems were compounded on account of the internal factors at RadioShack. The company chose this time period to clean up its inventories. It tried to remove several duplicate and end-of-life products from the stores though it was simultaneously merchandising all those stores. Apart from this, RadioShack also experienced shortages in some key product ranges including private brand products. In short, the company did not take into account its organizational capabilities and faltered in its planning. Though the company took corrective measures; it has appointed three new executives, the damage has already been done.
This has forced RadioShack Corporation (NYSE:RSH) on the back foot. The company has announced plans to cut 1,000 retail outlets from its chain. It is yet to announce the number of layoffs this move will entail. While the move will ensure a reduction in overheads, it can also potentially back fire.
