Electronics retailer RadioShack Corp will start selling video-game software in its stores, a Citigroup analyst said on Friday.

Our channel checks confirm market speculation earlier today that RadioShack plans to sell video game software in their stores in time for the holidays, analyst Bill Sims said in a research note.

Shares of RadioShack were up $1.42, or 6.4 percent, at $23.48 in late New York Stock Exchange trading.

The company did not return a call requesting comment.

In his note, Sims said RadioShack store managers indicated that the stores would receive up to 14 video-game titles. The stores are not expecting to sell hardware at this time, he added.

We don't believe the addition of video games is a thesis changer, and reflects, in our view, RadioShack's ongoing struggles to maintain the relevancy of their concept, Sims added.

He also said that while the move could aid same-store sales in the short term, it does not address deteriorating fundamentals in the rest of the business.

RadioShack has posted improved earnings in recent quarters as it shut unprofitable stores and cut jobs under the leadership of Julian Day, a turnaround veteran who became chief executive last year.

But sales have fallen for the last three quarters, raising concern as competition intensifies in consumer electronics.

RadioShack shares have risen about 40 percent this year.

(Reporting by Karen Jacobs)

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