RadioShack May Run Out of Cash Next Year, Moody’s Says - Bloomberg
Without a capital infusion, RadioShack will probably face a
cash crunch by the quarter ending Nov. 1, 2015, Moody’s said
today in a report. While the company has no debt coming due
until 2018, operating losses will hurt liquidity and hobble its
comeback, the credit-rating firm said. The continued cash burn
could also force suppliers to pull support, it said.
“Barring an improvement in the top line and margins, we
think they will continue to burn cash and their liquidity
position will continue to deteriorate,” Mickey Chadha, a
Moody’s analyst in New York, said in an interview.
RadioShack has continued to post sales declines and losses
under Chief Executive Officer Joe Magnacca, who joined the
retailer in February 2013 to lead a comeback. Magnacca, a former
executive at drugstore chain Walgreen Co. (WAG), has tried cutting
costs, closing stores and revamping others to focus on mobile
devices.
In the first quarter, the Fort Worth, Texas-based chain’s
loss widened to $98.3 million from $28 million a year earlier.
Sales slid 13 percent to $736.7 million in the period, which
ended May 3, marking the ninth straight quarterly decline.
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