Join The Discussion

 

Two from Fort Worth appointed by Gov. Abbott to university boards

Steve Hicks, a University of Texas System regent who has been a vocal opponent of regents who have criticized the system’s flagship campus in Austin, was reappointed to the board by Gov. Greg Abbott on Thursday. 

read more >

Fort Worth draws closer to deal with Lancaster developer

City staff are planning to introduce the developer Feb. 3 at a meeting of the City Council's Housing and Economic Development Committee.

read more >

Compass BBVA names Happel CEO for Fort Worth

BBVA Compass has appointed Brian Happel, most recently the Fort Worth city president, its chief executive officer of Fort Worth.

read more >

Two Fort Worth Baylor medical properties acquired

Baylor Surgical Hospital of Fort Worth and Baylor Surgical Hospital Integrated Medical Facility are among three facilities acquired by Carter Validus Mission Critical REIT II Inc.

read more >

Fort Worth minority business receives nationwide grant

Cuevas Distribution Inc., a minority- and woman-owned business in Fort Worth, is one of 20 small businesses nationwide to receive a $150,000 grant from Chase as part of the Mission Main Street program.

read more >

 

RadioShack's comeback effort 'highly in doubt,' UBS says

Lauren Coleman-Lochner
(c) 2014, Bloomberg News.


NEW YORK — RadioShack's turnaround attempt is "highly in doubt" and new remodeled stores are unlikely to change the electronics chain's tarnished reputation, according to a report from UBS.

The company's effort to revamp its shops and product lineup "has been akin to throwing things against the wall to see what sticks," Michael Lasser, a UBS analyst in New York, said in the report on Monday.

Since taking over last year, Chief Executive Officer Joe Magnacca has struggled to stem losses and sales declines at the Fort Worth-based retailer. Creditors blocked a plan to close 1,100 underperforming stores earlier this year, and the company is now in danger of being delisted from the New York Stock Exchange.

RadioShack fell 3.5 percent to 62 cents as of 1 p.m. Tuesday in New York. The shares have lost more than three-quarters of their value this year. Lasser, who recommends selling the stock, expects it to drop to 50 cents over the next 12 months.

The company also faces a credit crunch, he said. At the end of last quarter, RadioShack had almost $62 million in cash and about $362 million available under a credit line that comes due in 2018, compared with total debt of $614.5 million, he said.

"The company is running in a perilous position with dwindling financial flexibility," Lasser said.

Andrea McCauley, a RadioShack spokeswoman, declined to comment.

Magnacca is working on what he calls "five pillars" to rejuvenate the retailer, including revamping products and stores and boosting efficiency. On the product side, the company has added merchandise such as Beats headphones and announced a partnership with PCH International to help startups design goods for the chain.

The company is promoting new interactive features at its remodeled stores, including a speaker wall and headphone demonstrations where shoppers can test items. Even if those stores perform better, "we don't think it will be enough to impact the entire chain," Lasser said. "We are skeptical that the refreshed locations will provide a halo benefit to those stores that haven't been touched."

RadioShack is in danger of running out of cash in 2015, according to Moody's Investors Service.

"We haven't seen any evidence of any positive impact from the turnaround plan yet," Mickey Chadha, a Moody's analyst in New York, said in an interview.

While Magnacca has cut cash needs by pruning inventory, the company is still in a tough spot because more than half of its sales come from mobile phones, Chadha said.

"That is a very, very competitive space, and the margins are very thin, and you have no pricing power," he said.

 

< back

Email   email
hide
Catch
How 'bout them Cowboys?