RadioShack Courting New Backer As Losses Widen

[mvcg66b3r]

RadioShack is in advanced talks with a potential white knight that may provide a fresh capital infusion and avert a possible bankruptcy.

- See more at: http://www.twice.com/news/financial...acker-losses-widen/53980#sthash.p1wvfFNj.dpuf

 

[FredLeonard]

Despite the name, now with "radio" restored to "The Shack," Radio Shack is not really in "the business of radio." And as a retailer, they have been sinking even faster than radio.

 

[TheBigA]

The real problem is that the consumer electronics business is extremely competitive. Profit margins are low, the technology is constantly changing, and inventory is expensive and requires lots of square footage. Even the attempt to become phone stores hasn't worked out, because the market for phones has peaked. Lots of AT&T or Verizon stores have already closed. So this is a company that has attempted to survive, first by embracing computers, then taking on phones, but there is no next big thing right now, and they're losing out to other multi-product retailers like Wal Mart or even Sears in the electronics business. They've outlasted lots of competitors, but this may be the final roundup. Unless they can merge with someone.

 

[FredLeonard]

Poor selection and high prices.

In brick and mortar, they've got to compete with big box electronic stores like Best Buy, and even those aren't doing that well. And, of course, they've got to compete with online sellers. Radio Shack tried to get into big box retailing and failed. For too long, they sold only their POS house brand products. Their failure to compete in major purchases left them the place you go to get batteries cheap.

They recently closed a bunch of stores. The number of stores has been declining steadily for years before that. And they made several attempts to redecorate stores to make them attractive to regular consumers, other than electronics geeks. And remember, "you've got questions; we've got answers?" The result of that was you had to stand waiting at the cash register with money in your hand while the clerk tried to do tech support on a product somebody had bought someplace else.

Consumer electronics has had a high failure rate. We could start a whole thread of people listing failed chains. Circuit City. Silo. Crazy Eddie. American Appliances. Plus some that are barely around as online sites but no more stores.

Meanwhile, the Crazy Eddie doo-wop commercial lives on You Tube.
www.youtube.com/watch?v=avk9ClVHqhE

 

[CTListener]

Consumer electronics has had a high failure rate. We could start a whole thread of people listing failed chains. Circuit City. Silo. Crazy Eddie. American Appliances. Plus some that are barely around as online sites but no more stores.

In the '80s, we had a small chain up this way called Tokyo Shapiro. Slogan: "High Tokyo tech at low Shapiro prices." I bought a car stereo from them strictly out of amazement that they would build an advertising campaign around two stereotypes crammed into seven words. They didn't last long at all.

 

[Richard Stefan]

I still think their only survival is to designate 1 store in each area a parts store......get people back into visiting and buy parts that are needed now ..not in 3-4 days.

And of course hire help who knows what an xlr cable is. put the dumb ones in the other RS phone stores.

 

[Goat Rodeo Cowboy]

I still think their only survival is to designate 1 store in each area a parts store......get people back into visiting and buy parts that are needed now ..not in 3-4 days.

Parts are purchased by those of us who own a soldering iron and know how to read a schematic. And what have you purchased lately that you can actually get a schematic! And what have you purchased lately that has any discrete parts you could replace even if you were able to find a schematic.

I'm afraid out train has left the station!

I forget how many years ago it was that I went into a Radio Shack and gathered up a few quarter-inch phone plugs and jacks to make some custom "patch cables" for use at home and when I touched the tip of the soldering iron to the contacts where I wanted to attach the wires, the entire plug melted down.

In the current era, now and then I go in and buy a coupe of cables with plugs and/or jacks on each end. My game is to take them home and cut the cables and solder the ends of various cut cables together to fabricate the combination I need. And as the sales clerks rings me up, I always get the same question: "Would you like to purchase a warranty on this cable?" Maybe I should carry a camera in and capture the look of puzzlement when I explain/ask: I'm going to take them home and chop them in pieces and solder some of the pieces together. What would the warranty cover at that point?

There are days when I strap my car to my back-side and venture down to The City and visit FRYS or MICRO CENTER. As often as not, I still end up going on line when I get home and wait until my order arrives.

I really wonder if the people doing the inventory purchasing for all of these folks, large and small, own and soldering iron and know how to read a schematic.

 

[Goat Rodeo Cowboy]

I still think their only survival is to designate 1 store in each area a parts store......get people back into visiting and buy parts that are needed now ..not in 3-4 days.

And of course hire help who knows what an xlr cable is. put the dumb ones in the other RS phone stores.

A second thought: well... a question. Richard: have you worked in retail? Have you been responsible for hiring people to work at retail? Where are you going to get these people who know what an XLR cable is and can give advice on parts... who will work for what retail is willing to pay, and who will work at the schedule that retail demands.

Been there. Done that. In this case, I don't have the t-shirt as evidence, but I do have the greatest little "Eisenhower" style winter jacket in a brilliant blue with a RUGGED zipper that was issued to me the day Best Buy went "public". Those people in Minnesota certainly know how to spec-out a jacket for winter use.

 

[FredLeonard]

GRC: The problem is Radio Shack has invited people to ask questions. If they can't hire knowledgeable people, they shouldn't be saying they've got answers.

Funny thing: Radio Shack was one of the first in the personal computer (or microcomputer) business. And one of the first to fail. Some failures were excellent machines that got out-marketed, like the Amiga Commodore. And there was TRS-80, nicknamed "Trash 80," with its own not compatible with anything operating system. They did have the first laptop, the TRS-100, which was popular for a time and had the distinction of having the last code personally written by Bill Gates. They forced franchisees to carry only Tandy house brands like Optimus, DuoPhone and Realistic. They were crap, ugly and sold mostly to your old uncle who didn't know any better.

In 1990, Tandy dropped its house brands and made a deal to sell RCA branded products, even though RCA had gone out of business several years earlier and GE licensed the brand to various no-name manufacturers. Again, target market is old people who remember RCA and RCA Victor and didn't know any better.

A history professor famously once said, "the question should not be why did the Roman Empire fall but why did it last so long?" That same question could be asked of Radio Shack.

Interesting observations in the following...

http://www.washingtonpost.com/news/morning-mix/wp/2014/09/12/for-radioshack-the-end-is-near/

 

[gr8oldies]

I worked briefly at a Radio Shack in Ohio in 1979. The last thing they wanted salespeople doing was spending all their time with hobbyists buying 79 cent resistors. They wanted to move the big stuff. The markup on those "force feed" parts was huge, but didn't make you much of a commission check-nor a retained job.