Fitch cuts Radio Shack to junk

Fitch Ratings said it downgraded Radio Shack Corp.'s issuer default rating to BB+ from BBB, bank credit facility to BB+ from BBB, senior unsecured notes to BB+ from BBB and commercial paper to B from F2.

The outlook is stable.

Fitch said the downgrades reflect Radio Shack's weaker-than-expected operating results year to date in 2006 and the challenges associated with executing a turnaround in the face of increasing competition in the company's core product segments.

The ratings also reflect Fitch's expectation for modest improvement in the company's performance in 2007 as a result of the cost cutting and other turnaround initiatives implemented this year, the agency said.

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