Industry News

No Love For the Shack
and Sears Continues in Freefall

Last Chance For Store Closing Deals At Your Neighborhood RadioShack! Come Innovate With Us One Last Time

RADIOSHACK CLOSING ITS DOORS AFTER 96 YEARS THIS MEMORIAL DAY WEEKEND

WITH FINAL MEMORIAL DAY CLEARANCE SALES, RADIOSHACK MARKS ITS SHIFT TO ONLINE WITH AN ICONIC MEMORABILIA AUCTION

[When a long-established company like the Shack starts referring to unloading the last dregs of their sad little company as “an iconic memorabilia auction”—you can pretty well hear the fat lady singing, can’t you? I think at this point whatever feelings of nostalgia or sympathy many folks had, have vaporized. The sooner they vanish for good, the better.—Heartless Ed.]

FORT WORTH, Texas, May 26, 2017 — From humble beginnings in Boston in 1921, over the past 96 years RadioShack established itself as a globally recognized leader and the go to retailer for consumer electronics.  RadioShack has always been known as the place for answers to the American public’s technology and electronics questions. “You’ve got questions, we’ve got answers.”

At its peak, RadioShack operated over 7,300 stores with retail sales and operating revenue in the billions of dollars and its locations were famously within 3 miles of more than 95% of households across America. This Memorial Day Weekend, we will be closing over 1,000 stores, leaving less than 70 corporate and 500 RadioShack dealer stores around the country. With 96 years of history, go say goodbye to the RadioShack in your neighborhood. This weekend you still have an opportunity to come visit your nearby store for your electronic needs at great liquidation sale prices, before we close the doors for good.

 RadioShack introduced consumers to exciting and affordable gadgets and electronics that have become household items. As we cleaned out our historic archives in Fort Worth, Texas, we uncovered a cache of iconic memorabilia in 12 huge legacy safes, including: unused original TRS-80 Microcomputers, Realistic Transistor Radios, Tandy computer software games, original brick cell phones, gold commemorative watches and so much more. We all remember coming into RadioShack whether it was for the battery-of-the-month, new walkie-talkies, or to check out the newest RC toy cars. Many of these nostalgic items will be up for auction over the next 30 days.

At the end of this month [meaning May—oops.–-Ed.], RadioShack will be closing its doors at all but 70 retail store locations as we migrate to RadioShack.com and we cannot thank you, the RadioShack family, enough for sharing in the journey throughout the years. We have heard countless stories and truly appreciate the millions of employees and customers that have made RadioShack their neighborhood convenience electronics store for the past century and we invite every home in America to come innovate with us one last time.

RadioShack will be hosting the online auction beginning today, May 26, 2017 at www.radioshack.com/auction/. Check in regularly over the next month as we will be revealing over 500 RadioShack classic items for auction.

Again, be sure to visit your local RadioShack location this Memorial Day Weekend for your last chance at clearance pricing or visit us at www.radioshack.com !

We cannot thank you enough for your patronage and support over the years and continued support as we shift to a primarily online business.

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Sears Holdings Reports First Quarter 2017 Results

[The tale of woe that is now Sears, once the world’s greatest retailer, continues. This presentation of Q1 2017 appears rosy, with the first quarterly profit shown in years. What this brief synopsis doesn’t make clear is that that profit is due solely to a payment on the purchase of the Sears Craftsman brand, probably the single most valuable asset that the company still owned. Well, they own it no longer, and if that payment is removed, this quarter would’ve shown about a half-billion dollar loss, same as Q1 2016. This is just sad.  FWIW: I would prefer to focus upon industry news a little closer to the audio biz, but the fate of Sears may carry implications for all B&M retailers in America, including audio dealers. —Ed.]

HOFFMAN ESTATES, Ill., May 25, 2017 — Sears Holdings Corporation (“Holdings,” “we,” “us,” “our,” or the “Company”) (NASDAQ: SHLD) today announced financial results for its first quarter ended April 29, 2017. As a supplement to this announcement, a presentation, pre-recorded conference and audio webcast are available at our website.

In summary, we reported net income attributable to Holdings’ shareholders of $244 million ($2.28 earnings per diluted share) for the first quarter of 2017 compared to a net loss attributable to Holdings’ shareholders of $471 million ($4.41 loss per diluted share) for the prior year first quarter. Adjusted for significant items noted in our Adjusted Earnings Per Share tables, we would have reported a net loss attributable to Holdings’ shareholders of $230 million ($2.15 loss per diluted share) for the first quarter of 2017 compared to a net loss attributable to Holdings’ shareholders of $199 million ($1.86 loss per diluted share) in the prior year first quarter. Adjusted EBITDA was $(222) million in the first quarter of 2017, as compared to $(181) million in the prior year first quarter.

Edward S. Lampert, Holdings’ Chairman and Chief Executive Officer, said, “While this was certainly a challenging quarter for our Company, it was also one that clearly demonstrated our commitment to return Sears Holdings to solid financial footing. We recognize that we need to accelerate our efforts to improve our operational performance and are moving decisively with our $1.25 billion restructuring program.”

Highlights since the beginning of the first quarter include:

  • Delivered significant progress on our strategic restructuring program, with $700 million in annualized cost savings already actioned to date, and announced incremental actions to increase our annualized cost savings target to $1.25 billion from $1.0 billion;
  • Paydown of approximately $418 million of term loans outstanding under our revolving credit facility;
  • Entered into an agreement with Metropolitan Life Insurance Company (“MLIC”) to annuitize $515 million of pension liability, which serves to reduce the overall size of the Company’s pension plan, reduce future cost volatility and reduce future plan administrative expenses;
  • Reached an agreement to extend the maturity of $400 million of our $500 million 2016 Secured Loan Facility from July 2017 to January 2018, with the option to extend further to July 2018;
  • Expanded our Shop Your Way VIP program to reward our members based on spend and frequency, which has resulted in over a 50% increase in the number of VIP members in the first quarter, compared to the same period last year;
  • Opened the first DieHard Auto Center in San Antonio, Texas, with an innovative store format that offers state-of-the-art technology and services, that, combined with our experienced associates, can help today’s drivers make the right choices for their vehicle’s needs; and
  • Named a 2017 ENERGY STAR Partner of the Year-Sustained Excellence Award winner for continued leadership in protecting our environment through superior energy efficiency achievements.

Mr. Lampert added, “We remain focused on driving the growth of our Shop Your Way ecosystem and are pleased with the traction we gained with our VIP membership base, which more than doubled in the last year.”

Rob Riecker, Holdings’ Chief Financial Officer, said, “During the first quarter we took decisive actions to reduce our cost base and drive operational efficiencies which allowed us to make significant progress on our restructuring program. We also remained focused on increasing our financial flexibility and creating value from our asset base to ensure we continue to meet our financial obligations and fund our transformation. We will continue to evaluate our options to deliver further improvements to our operational performance and balance sheet.”

[If you are so inclined or need something guaranteed to induce sleep, here’s the full text.]

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