RadioShack may be facing the end after decade of decline
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Version 0 of 1. Through every retailing revolution of the past generation — from the rise of big-box stores to the arrival of e-commerce giants such as Amazon.com — there was always RadioShack. The electronics chain managed to hang on in failing suburban shopping plazas and on city street corners even though it wasn’t exactly a destination store. It became known as the store to pick up a spare battery or a cellphone case but not to make a major purchase such as a tablet or TV. And that made the brand a symbol of the failure of analog retailing to adapt to a digital world. Last year, the chain poked fun at its dated reputation in a Super Bowl commercial that joked that it had left the 1980s behind. Still others called it “the cockroach of retail.” It survived and survived. But RadioShack might be finally facing its end. This week, the New York Stock Exchange moved to delist the chain, which was founded nearly a century ago by two ham-radio enthusiasts. Some of its 4,000 stores are rumored to be in the process of being sold to Sprint or Amazon. Talk of bankruptcy is again raging among investors. RadioShack has reinvented itself plenty of times before: In the 1980s, the shop that was known as a destination for tinkerers and gearheads made a big bet on the $600 TRS-80 personal computer. As cellphones became popular, RadioShack shifted its attention there, but that strategy had a short shelf life. More recently, the company threw one hail-Mary pass after another to save itself. It pumped millions of dollars into a redesign, secured a $120 million financing lifeline from hedge fund Standard General, and went back to its roots with a branding push aimed at hipsters with a do-it-yourself ethos. And yet experts say the brand became stale as it moved too slowly to adapt to a world in which gadgets aren’t just for gearheads but are deeply entwined in our everyday lives. “It was too little, too late,” said Will Frohnhoefer, an equity research analyst at BTIG. “They had multiple years — a decade of decline — to try to reverse things, and they didn’t seem to come up with a coordinated strategy until very late in the game.” As RadioShack became rudderless, its rivals sharpened their focus: Amazon and Wal-Mart have focused on luring shoppers with rock-bottom prices, while Best Buy has concentrated on customers eager to test out a wide variety of gadgets before opening their wallets. Apple, meanwhile, cornered the market for shoppers seeking a luxury tech-buying experience. RadioShack continued to scramble to more clearly define its image. Last year, it added Fix It Here stations at some of its stores where experts can fix problems such as a cracked cellphone screen or broken phone battery in an hour or less. (They are not able to deal with more complex problems such as a damaged motherboard.) The company redesigned some of its stores to try to make them more interactive, incorporating features such as a “speaker wall” that allows customers to sample some of them. Smartphones and tablets are displayed so customers can have hands-on time with the devices. Previously, the chain showed only printed renderings of the gadgets. But the problem with the makeovers, analysts say, was that although they gave the stores a more sleek and contemporary feel, they didn’t offer anything much different from what had been offered at Apple or Best Buy stores for about a decade. RadioShack declined to comment for this article. The potential demise of RadioShack is a symbol of how fast moving the currents are in today’s retail industry: The company was relatively early to the e-commerce game, and as recently as 15 years ago it was considered a vital channel for bringing emerging technology to curious consumers. But it hasn’t turned a quarterly profit since 2011, reporting a $161 million loss in December and a 13.4 percent decline in sales at stores open more than a year. Bloomberg News reported Monday that Amazon was considering buying some of RadioShack’s stores and transforming them into showrooms for merchandise or outposts for customers to pick up and drop off online orders. Some experts, however, were skeptical that such a move would be beneficial for Amazon, given that many of RadioShack’s locations are in small malls that lack cachet and foot traffic. (Amazon founder Jeffrey P. Bezos owns The Washington Post.) Whether RadioShack has suitors for its stores or not, experts say it’s unlikely the company will be able to hang on through this latest round of turbulence. “I think it’s just a natural evolution of a company that lost their way when it really made a difference, when the whole industry was shifting,” said Dave Marcotte, senior vice president at consultancy Kantar Retail. |