RadioShack posted a loss of close to $140 million in 2012, but Joseph Magnacca, the company’s new CEO, believes he can turn it around, and he’s giving himself 100 days to turn in a plan that will do it, The Dallas Morning News reported on Wednesday, February 27.
Magnacca didn’t specify what his next steps would be following the 100-day-deadline, but he did outline some of the areas where he would be looking to cut losses and increase profitability.
In a conference call with analysts, Magnacca rebuked his company’s focus on wireless business, stating that “some of the heritage we had inside our business” may have been lost.
According to The Dallas Morning News report, profit margins for products like the iPhone 5 and Android-platform smartphone devices are low and have been weighting down the company’s performance despite a somewhat successful holiday push with Google Android phones.
An unsuccessful partnership with Target has also held RadioShack back, and according to Dorvin Lively, executive vice-president and CFO for the company, that is now “winding down.”
(Analysts have estimated the partnership resulted in approximately $37.5 million in operating losses for RadioShack.)
Magnacca said he wanted to focus on products with higher margins as well as the “do-it-yourself” customer.
Lively added that some products receiving more attention from the company will include iPhone and smartphone accessories, which showed a 2.2 percent increase in 2012 to $1.3 billion.
The improvement ended a yearly decline dating back to 2008 for this category.
Reuters noted RadioShack may also have to close stores and sell businesses if its fiscal house isn’t in order by 2014.
Fourth-quarter results revealed a $139.4 million loss on overall sales of $4.26 billion.
Do you think RadioShack will be able to come out of its losses without closing additional stores?