RadioSmack

These aren't the best of times at RadioShack (NYSE: RSH  ) . The electronics retailer announced that it would be letting go as many as 450 employees, most of them at its Forth Worth headquarters.

It's yet another humbling retrenchment for the small-box concept. RadioShack has also shuttered roughly 480 poorly performing stores this year, and was disgraced when it had to can its CEO for padding his resume back in February.

RadioShack is in trouble. It had a rough holiday selling season, despite healthier reports out of big-box consumer-electronics rivals like Best Buy (NYSE: BBY  ) and Circuit City (NYSE: CC  ) .

RadioShack should be thriving in this kind of climate, where consumers are swapping in and out of cell phones and upgrading to satellite radio systems. We can argue that limited selling space may be the chain's Achilles heel. The superstores have been feasting on the popularity of pricey flat-screen televisions while RadioShack remains the place to pick up a pair of AA batteries or an A/V cable.

You can succeed with a small footprint if you're in the right niche -- just walk into a Gamestop (NYSE: GME  ) for proof -- but RadioShack has tried to achieve too many things from its stores, and it needs a makeover in the worst way.

Last month, RadioShack posted a loss for the June quarter, with same-store sales dipping by 3%. It may still be too early to judge the company's turnaround plan, but the initial prognosis doesn't look good.

Corporate layoffs may help shave costs, but they obviously aren't the catalyst to get folks back into RadioShack stores and buying again. The company is stocking all of the right gadgets, like MP3 players, Skype phones, and flash memory cards. It just has a brand that needs to be reestablished. Unfortunately for RadioShack, it will now have hundreds fewer employees to think up a turnaround plan that will stick.

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Longtime Fool contributor Rick Munarriz remembers when RadioShack was the Love Shack with investors. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.