RadioShack Corp. used comedy in a Super Bowl ad to show its stores being dismantled and then rebuilt. But on the Tuesday after the Big Game, the news broke that some of the stores were going to be dismantled and stay that way. A few weeks later, in early March, the company confirmed it would be closing 1,100 stores.
The Super Bowl commercial took a lighthearted look at the company’s outdated image by bringing in a number of characters from the 1980s, including Erik Estrada, Hulk Hogan and Alf, who announce that they want their store back. The characters start tearing out shelves and hauling out products. It was one of the most popular ads run during the game.
Will still have over 4,000 stores. According to CEO Joseph Magnacca, the stores that would close were lower-performing locations that were expected to lose money this year. Some speculate that there are just too many Radio Shack stores, and this cutting will improve efficiency and, by extension, business. With one of the largest footprints of any U.S. retailer, it is reported that 90% of the U.S. population lives or works within minutes of a Radio Shack location. It is not yet clear which specific stores will be shut down, or exactly when the closings will start.
The Fort Worth, TX, company has been working very hard to change its image from that of an old-school electronics store to a place for shoppers who are looking for entertainment items and tech accessories like smartphone cases. In October, RadioShack was able to secure $835 million in loans to refinance $625 million in debt. The funds, from a group led by GE Capital, also freed up capital for the company’s overhaul.
Radio Shack has struggled. RadioShack has struggled to reverse a series of losses that was deepened by a sales strategy that was focused around smartphones. Last year, company executives suggested that RadioShack would resist shrinking its company footprint; instead it would focus attention on reinventing the brand’s image. For instance, a store may close in one neighborhood but reopen in a higher-traffic neighborhood instead. If that turns out to be the case, the executives said that the total number of stores would remain the same.