RadioShack bolsters leadership as Q3 loss widens
RadioShack posted a net loss of $112 million during the third quarter of fiscal 2013, compared to a net loss of $47 million in the year-ago period. It was the retailer’s seventh straight quarter posting a net loss.
The company also named Paul Rutenis, formerly senior VP, general merchandising manager for the home division of J.C. Penney Company, as its new chief merchant.
RadioShack said its total net sales for the quarter were $805 million, a 10% drop from $898 million a year earlier. The chain attributed the decline to an 8.4% drop in same-store sales due to reduced sales for each of the company's product platforms.
Joseph C. Magnacca, CEO of RadioShack, said the retailer is currently undergoing a process of reinvigorating and modernizing stores that will affect nearly all of its 4,300 locations. He also said RadioShack is improving its assortment.
"We are moving forward quickly and as planned with our turnaround efforts,” said Magnacca. “As we have said, we expect our work to take several quarters and during that time our results will vary quarter to quarter as we make strategic changes to improve our long-term financial performance. This quarter reflects our strategic decision to accelerate the improvements to the product assortment in our stores by removing duplicate and unproductive inventory."
RadioShack has secured a financial boost from GE Capital, securing a loan of about $835 million. The loan, backed by inventory and other existing assets, will help the chain refinance the company's outstanding bank debt and free up cash for its ongoing revamp. RadioShack says it has strong balance sheets moving forward.
In announcing the appointment of Rutenis as senior VP, chief merchandising officer, RadioShack said he will be responsible for leading all retail categories, covering well known global brands as well as private branded products, and will work with the company's executive leadership team to drive a clear merchant strategy and alignment with the retailer's sales, marketing and operations divisions. Prior to J.C. Penney, Rutenis served in senior positions at Dick's Sporting Goods and Foley's Department Stores in a career spanning 22 years in merchandising.
RadioShack also announced the appointment of Janet Fox as senior VP of global sourcing. Fox has spent almost 30 years in retail sourcing, most recently as senior VP, sourcing, quality, materials and technical design at Under Armour.
"We are very happy to have Paul and Janet join our company at a critical point in our turnaround, Magnacca said. “They bring with them a demonstrated track record of success and will contribute to the execution of our strategic initiatives. Since the beginning of the year, we have brought on board six new members of our management team as we rebuild and enhance the strength of our executive leadership."
The company also announced today that Martin Moad, VP and controller, has decided to retire after 34 years with RadioShack, effective Dec. 27. RadioShack's William R. Russum has been named VP and corporate controller and will serve as the company's principal accounting officer.