Radio Shack having a tough go of it

[K1JJ]

As many of us know, Radio Shark has changed a lot over the years.   Moodys has now lowered Shark's bond rating to "junk status."  This in itself is not a good sign.

"Shares of RadioShack (RSH) were getting pummeled Tuesday, falling more than 10% to $5.30, after the electronics retailer said it lost money in the first quarter. The stock sank to an all-time low earlier in the day."


Interesting story of why:

http://money.msn.com/stock-broker-guided/latest.aspx?post=7b27e36b-9688-403d-a8f4-159805f06b93


T

[WA1GFZ]

Hey it takes a lot of income to support that nice building full of bean counters in downtown Fort Worth.

[KA3EKH]

Can't think of the last time I have been to one, maybe five six years ago and then all they had was crap. EBay and online finished them off for me. People think Hamfest are dead or dying but RadioShack has to be far worse off. What year did Lafayette go out of business? I vaguely remember as a little punk kid going to the strip mall and buying parts there but then that was replaced by a RadioShack and think maybe by the nineties they stopped selling any components. I remember buying lots of little TTL devices and other stuff there back in the seventies and eighties.  Also remember that most towns had electronics wholesalers that sold radio and television parts along with television repair shops but all that’s gone too. When I was in high school I went to a technical school, that’s where the district sent all the slugs that could not make it in the academic world. At the time I took three years of Radio & TV Electronics where they thought you how to work on television sets with the idea that it would be a job. Go figure, when the last time you saw a TV repair shop? Fortunately because of my Ham experience was able to get into the broadcasting side and think that may have worked out a little better then owning a TV repair shop. Maybe my point is that things come and go and just like Lafayette and the local TV repair shop have come and gone maybe RadioShack has survived a little longer pushing cell phone junk but it looks like there time is up.

[Pete, WA2CWA]

"Junk Status" is not the end of the world but more as a company wake up call.

[Pete, WA2CWA]

What year did Lafayette go out of business?

Lafayette file for Chapter 11 protection in 1979. 60+ stores were closed. About a year later 60+ more stores were closed. Remaining 5 stores then went under the Wards umbrella for several more years while still retaining the Lafayette name. Around 85/86, those stores were closed, and soon thereafter, Circuit City stores appeared in the same area.

[W7TFO]

I've seen several of those stores out here in AZ de-franchise, change the name, and go on selling items left over and some new stock of high turnover parts.

73DG

[Sam KS2AM]

While I don't doubt they're having financial issues its just sounds like the writer of the article decided that the sky is falling and has sprinkled a few facts into what is just mostly an unsubstantiated editorial about a company they dont like, or maybe would like to see go under for some reason    hmmm...

The article is titled "Why does RadioShack still exist?"  No intention of answering their own question so maybe just a rhetorical question hoping that they will fold?

"The stores have essentially become showrooms for people who want to check out the products -- and then buy them from Amazon "  The author has hard facts to support this?  Maybe they've followed RS window shoppers home and peered in their windows while they purchased things online?

"The company lost $8 million, or 8 cents a share, way down from the $35.1 million profit it made a year earlier. "  So if a company makes a profit one year and has a loss the next, there is no hope of profit ever again and they should fold now ?

"That the company has actually been able to make it to this point is shocking."  Is it possible that RS knows more about their business than the "shocked" writer of the article ?

"The few times I've been into RadioShack lately, "  Ahh another person claiming that they rarely go to RS but at the same time they go there just often enough to advise you on exactly what the problem is with RS. Right...

"First, the store is usually empty. Second, the salespeople are a little too attentive, descending on me the minute I walk in"  So has the writer visiited hundreds of RS stores at all hours of the day to get an accurate picture, or simply visited the one in their local strip mall which tells them exactly what is going on in all RS stores nationwide?

[KA0HCP]

Over the last year my local store has followed the stated plans to increase parts stocks, add electronic kits, etc.  They have even hired a couple of young former military electronic technicians.

From my perspective they are doing better, and I'm buying more stuff for my projects and radio refurbishment.   I sure hope they pull through.

[k4kyv]

RS's first big kick in the BAs was when the CB boom fizzled.  I remember in the mid 70s, going into a typical Radio Shack store, and it would be full of CBers shooting the breeze.  I remember one big husky customer one time, a self-appointed expert, explaining to others in the store that a licence was required (this was before the FCC delicensed CB) if you ran more than one watt; anything below that threshold didn't require a licence.   They had quite a few components and other widgets, many of which would be useful in building a CB leen-yar.

I don't know why one would browse in a local store then order from Amazon.com.  By the time you pay shipping charges, the Amazon price is probably as high or higher than the local price, particularly if you live in a state where they charge sales tax.  Plus getting the merchandise in one  piece via the parcel delivery "service" is a crap shoot at best, and you have to wait at least the better part of a week to get it.  If I see an item on the shelf and decide I want one, I would just go ahead and pay the local price and take it home - instant gratification.

The main reason I buy stuff from Amazon and other on-line retailers is that none of the local merchants carry it in stock. Or else it is something I don't need immediately and it saves me the hassle of going into town and visiting the stores. Occasionally I find something on sale at a ridiculous price and I buy it on line because of its price, but rarely or never as a follow-up to a visit to a local merchant.  I think that "browse locally and buy on line" is a bogus non-issue.

[K5UJ]

"The stores have essentially become showrooms for people who want to check out the products -- and then buy them from Amazon "

Bookstores have the same problem--folks looking at the books then buying them from Amazon. 

Whenever RS becomes a topic on one of the other ham radio forums, all these know-it-alls pile on attempting to appear sophisticated by bashing RS.  All I can say is a couple weeks ago I needed a dinky spst toggle switch and I drove around trying to find one--auto parts stores, Lowe's (they have a goofy "science project" category), the local surplus parts store,  but only RS had what I needed; I only wanted one, I could buy one, no shipping, no minimum order of $15, I drove home and finished my project.  The status conscious ex-CBers who want to bash RS out of business probably don't care though--they probably never build or modify anything.

[W7TFO]

Every town that has a radio station that I do work at, I always scope out the RS or nearest thing. 

I try to avoid Frys...they remind me a cross between a mental institution and a sewage treatment plant...so depressing.

Many times RS has saved me a lot of travel and/or time on the job.

73DG

[K3ZS]

Seems like it was a few years ago RS had a fire sale on its parts inventory.   I stocked up on some parts I thought I could use.   Haven't been back much ever since.    I find I am buying more common stuff at Amazon.    Mainly because of things not carried locally that once were.   I just bought a case of 30W single viscosity oil for my old lawn tractor.    I can't find that around here anymore and the prices are about double for 10W-30 oil in the case here.    I got the case for $23 (12 quarts) and bought another thing I needed to get the order above $25 which made it free shipping.   It's just plain economics.

[W1RKW]

For me RS took the route of Sears and any other big box.  Neither have much to offer but junk. An RS opened here in my QTH about 3miles away. I went in looking for a USB cable. Figured I could get a cheapie, nope. The cheapest was $20.00 for a gold plated POS. Found the same length POS at an independent  computer store a tiny bit further for $5.00. Guess who won. RS used to have inexpensive stuff. For some reason they think gold is the way to go. I like perusing the radio shack catalog website of their old cats. That business model could still work today to some extent.  The gadgets we find elsewhere could easily be sold through RS. an independent needs to be able to adapt to conditions on a moments notice in order to survive. So do some don't.

[K7EDL]

I went to RS last week, bought a remote for my 10 year old TV it was cheaper than sears. (works great) in the last year I have also bought a few components etc. nothing major I will miss them if they go under.  

Oh and there is a local TV repair man in the area, he started out after tech school to do general electronics but the TV business took over and that is all he has time for.  

73

Eric

[K9PNP]

The local RS in our little town has actually started stocking some useful parts lately. The only problem I have found is that the employees don't know much about what they have in stock.  Unless you have a part number or can find it yourself your are in trouble.  We had a really good manager here that knew electronics, but he got moved to another shop that was having big problems.  Guess he's the district version of a trouble shooter.  Will be interesting to see what happens.  I still buy from them when I need something they have for a personal project or for the public service radio system.  Beats driving 30 miles one way to the closest actual electronics parts store [where they know what they have, what is is used for, and a possible replacement for a part they don't have].

[WQ9E]

Unless RS is able to rapidly develop a stable strategy with a resulting desirable and stable retail image the only question is how many times they are going to circle the drain before finally going down.

When W T Grant failed in 1976 that was then the largest retail bankruptcy in U.S. history and second in size only to the dissolution of Penn Central.  Many factors led to this but primary were the inability to adopt a stable strategy (at least 7 significantly different strategies adopted during the final 5 years before bankruptcy) and the financial drain from becoming a credit card issuer of last resort to the least credit worthy customers.

Fast forward to RS and try to count how many significant re-imaging attempts have taken place in recent history.  Ask consumers to describe their perception of a specific successful retailer and you will find a lot of agreement as to perceptions and most of these will be positive.  Ask the same group about RS and you will get a lot of fuzzy responses and a lot of negatives.  One of the most important basics of retailing is if perceived image is not positive and fairly stable most consumers will never even consider shopping within that store and you can easily observe that from the lack of traffic in the store.

Adding to the problems of RS is as technology evolves high levels of pre and post-sale service are no longer necessary.  When RS came to life in 1921, buying a radio meant also having it installed since it needed an outside "aerial" and ground connection.  By the 1950s radio meant AA5 with a built in loop and the only installation needed was putting the AC plug in an outlet.  Early color TV needed outside antennas along with purity, convergence, and ion trap adjustments even if you only moved it from one side of the family room to the other.  Now you bring home a TV, plug in a couple of cables, wait while it finds your WiFi system and you are done.  Early computers required lots of setup-now there is none.   

For most of the products RS sells the only thing they can offer that online cannot is immediate product delivery and in that they face the same issue that allowed Sears and Montgomery Ward to kill off the general stores by the turn of the last century, limited product choice coupled with higher prices.  RS is limited by space and financial resources to a fairly small choice of products within each category so they probably don't have exactly what you want but the online source does.  In most states online has the further advantage of allowing consumers to avoid paying sales tax (even if doing so is not legal) putting the brick and mortar store at a further disadvantage.

It might be possible for RS to evolve in the same manner as the convenience store, higher prices offset by convenience.  A gallon of milk at the combined gas station/convenience store is far more expensive than the same from Wal Mart but worth paying rather than driving and waiting in line.  Providing higher levels of service also allows one to charge a higher price but that requires being able to provide that level of service.

I would like to see RS survive because they are a convenience but I will be very surprised if they do.   As the world evolves, what was valuable once has no place anymore.  We can hold onto vintage gear just like auto collectors hold onto vintage cars but just like the old full service gas station/garage on every corner is gone forever so will other businesses disappear.  There are very few things that can be frozen in time no matter how much one might wish to do so.

[n1ps]

Yes I agree Rodger.  The RS brand has certainly changed over the years and they adapted quite well.  But what is the brand now?  They really are a me-too brand and they compete with their own stores with on-line purchasing.  I stopped in to one of the locally owned stores recently and they were hurting.  No doubt the economy has hit them too.  I know this, that for almost any consumer electronics, the last place I would think of is RS.  Everything has a life cycle and RS may be near the end of theirs.  Hope I am wrong as occasionally I do run to the local store looking for a component.  But alas an old guy coming in once in a while will not pay their bills.   

Peter

[WA1GFZ]

Bob,
My wife keeps an eye on the price of the kitchenaide mixer I bought her for Christmas. Sears still has the best price by as much as $100.
Sears still sells a great washing machine.
I still buy parts at RS. Still better than nothing.

[W1VD]

Different times ...

Can remember when an RS 'battery card' was enough to entice customers to regularly stop in, get their free battery and have a look around. Today, folks wouldn't even take the time to drive through the parking lot for a free battery even if the salesperson walked it out to the car.   

[Opcom]

One of the local stores here got rid of the crabby guy (to whom a customer always seemed to be an unwelcome interruption or a burden) and hired a nice man with a good attitude. I'd welcome it if RS started handling the things that we used to go to surplus stores for. Not necessarily the old junk but a decent supply of modern electronic parts.

[ke7trp]

Radio shack had a store here called "tech america".  Anyone remember those stores?  A ham radio operators dream come true.  They had one just 4 miles from the house. 

Four times the size of a normal rat shack full of tech supplys at great prices.  A WALL full of electronic parts. You could walk in and say I need four 47 UF 450 volt electolytic capacitors, some 1n5408s and some shotky diodes and the guy would hand you the parts. They had a wall full of belden coax on rolls.  Any type you wanted. Endless connectors and gadgets.

Man that was nice.  I was up there 3 times a week at least.   It was ALWAYS busy.  Like 10 to 15 people inside at almost all times.  I was shocked when they closed it. How could you mismanage a busy store so badly that you had to close them all down?

c

[Pete, WA2CWA]

Radio shack had a store here called "tech america".  Anyone remember those stores?  A ham radio operators dream come true.  They had one just 4 miles from the house. 

Four times the size of a normal rat shack full of tech supplys at great prices.  A WALL full of electronic parts. You could walk in and say I need four 47 UF 450 volt electolytic capacitors, some 1n5408s and some shotky diodes and the guy would hand you the parts. They had a wall full of belden coax on rolls.  Any type you wanted. Endless connectors and gadgets.

Man that was nice.  I was up there 3 times a week at least.   It was ALWAYS busy.  Like 10 to 15 people inside at almost all times.  I was shocked when they closed it. How could you mismanage a busy store so badly that you had to close them all down?

c

The Industrial division was sold off in the 90's. You got to sell a lot of parts at the retail level to make good money, and on-the-shelf parts that have minimal turns, can be a real asset killer. It was a good move on their part to rid themselves of the money drainer.

[WA3VJB]

Different times ...

Can remember when an RS 'battery card' was enough to entice customers to regularly stop in, get their free battery and have a look around. Today, folks wouldn't even take the time to drive through the parking lot for a free battery even if the salesperson walked it out to the car.   

Pretty much right-on.

One way to keep their free 6-cell flashlights filled was to have at least 6 battery cards to work.

[K5UJ]

I remember those battery cards and the 5 or 6 cell plastic flashlights they gave away free.  Back before xenon bulbs and so on that thing really threw a beam. 

I never even heard of Tech America until now.  Had no idea they had such a thing.  Wow, it sounds great.  They certainly would have gotten business from me. 

[flintstone mop]

I always liked RS Batteries. They seem to last longer than Duracells. And the box prices for highly used batteries at my QTH is a pretty good deal.
My MFJ 259 loves A-A batteries.
If I have a crash project that just popped up, I'll go to my local "Shack" and usually find what I need, and not have to wait for shipping and doing business on-line.
Fred