■ Mary Ann Morris / Editor
In a move that wasn’t completely unexpected, Radio Shack, the struggling electronics chain that filed for Chapter 11 bankruptcy protection in 2015, has announced it is closing 10 stores in the Inland Empire – two of which were in Hemet.
The announcement tolls the death knell for 552 stores nationwide, which translates to 36 percent of the chain’s remaining stores. The closures affect the stores with the “lowest sales velocity and highest rent,” according to the company.
The Hemet stores, one located in the Ramona Plaza at 1458 E. Florida Ave., and the other in the Hemet Valley Mall at 2200 W. Florida Ave., closed their doors forever March 28. All affected stores will close by the first week in April.
“The last few days, we will be boxing up and shipping the inventory to the remaining stores,” said Kyle Desjardin, sales associate at the Ramona Plaza store. Two employees were affected by the Ramona Plaza store’s closure. Desjardin declined the company’s offer of relocation. Employees at the Hemet Valley Mall location declined to comment.
Desjardin said that the stores in Lake Elsinore, Perris and Riverside will remain open, and sales at the company’s internet site will continue. The Radio Shack location in Hemet’s Page Plaza, at 1135 S Sanderson Ave., closed in 2015.
“Over the course of the past two years, our talented, dedicated team has worked relentlessly in an effort to revitalize the company and the RadioShack brand, while providing outstanding service to our customers. We greatly appreciate their hard work and dedication,” said Dene Rogers, Radio Shack president and CEO, in a statement. “Since emerging from bankruptcy two years ago as a privately owned company, our team has made progress in stabilizing operations and achieving profitability in the retail business, while our partner Sprint managed the mobility business. In 2016, we reduced operating expenses by 23 percent, while at the same time saw gross profit dollars increase 8 percent. However, for a number of reasons, most notably the surprisingly poor performance of mobility sales, especially over recent months, we have concluded that the Chapter 11 process represents the best path forward.”
In an effort to stem the financial hemorrhaging, RadioShack was purchased by General Wireless Operations Inc, in April 2015 after the bankruptcy filing and incorporated the Sprint Wireless brand into its stores.
Chapter 11 of the Bankruptcy Code is often used by corporations to protect it from the threat of lawsuits from creditors while it reorganizes its finances. The reorganization plan must be approved by a majority of its creditors and typically the company maintains control of the business and its assets.