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Thread: Shack's end looking nigher than usual

  1. #1

    Default Shack's end looking nigher than usual

    I know Radio Shack's future has looked doubtful for a decade now, but it's looking more likely than usual that this will really be the year the Shack dies (despite the high hopes we all had back in February when they hired the dream team of Messrs. Clavin and Poncherello).

    We presently anticipate announcing a recapitalization alternative, in the near term, which may be our most likely course of action, but we are continuing to evaluate all of our alternatives to restructure existing debt terms and other arrangements to provide additional liquidity. There can be no assurance that we will be able to successfully implement a long-term solution.

    If acceptable terms of a sale or partnership or out-of-court restructuring cannot be accomplished, we may not have enough cash and working capital to fund our operations beyond the very near term, which raises substantial doubt about our ability to continue as a going concern.

    (RadioShack Corp. quarterly report on Form 10-Q, September 11, 2014)

    I've started thinking about my final Radio Shack purchase. I may go buy one more of the venerable mini-amp (cat. #277-1008, sold continuously since 1967). You definitely want one of those for any Model I/III system, or else Robot Attack won't talk to you.

    If they put up a "WE LOST OUR LEASE! EVERYTHING 50% OFF!" banner, I'd probably buy a Raspberry Pi too.

    Anyone else thinking about this?

  2. #2
    Join Date
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    With Best Buy having trouble, I can only imagine what it must be like for Radio Shack. I used to work for a retail wing of Tandy Corporation that had a set of Best Buy-like stores in the '90s called McDuff Electronics, and underneath McDuffs was a of stores branded AV&C (Audio, Video & Computers). Never heard of AV&C? Not surprised, since there were only three in the whole US. AV&C was born out of McDuffs... the only difference being that the employees didn't work on commission, cell phones excepted.

    Most of the employees that I worked with at AV&C were veterans of McDuffs. Before McDuffs in our area "folded" and was replaced by AV&C, McDuffs had a fairly prominent presence in the local mall, near the hub ($$$ rent) and within the same mall there was Radio Shack at a far end of one of the arms ($ rent). They had all the latest TVs, AV gear, Computers (Apple, IBM, and Sony branded computers among others), and then one day they just closed. One of my co-workers who was present at that time said, "yeah, we showed up to work one day and there was a guy from corporate waiting for the morning sales staff to come in and told us, "stores closed! If you stay on and help load the truck you'll get a severance. They loaded up the truck that day and that was that." No warning at all that was about to happen... even the manager didn't know! They opened up the standalone AV&C a couple months later and kept on some people from the old store. When I worked there, we shared a common warehouse with the Radio Shack stores, and there was quite a lot of overlap in what we would sell for Computers and AV gear. What didn't overlap was what the transfer costs were for Radio Shack vs. AV&C. AV&C's costs were always significantly higher than Radio Shacks. I suspected that Tandy had set our stores up as some sort of tax shelter for Radio Shack, making the stores look bad on paper since there's absolutely no reason that the cost for goods should be any different. Same thing with McDuffs in the mall. The store was always busy and the old employees figured that they must have been protecting the Radio Shack business by cannibalizing the McDuff store.

    So, I've never been too surprised since my experience with Tandy Corp that Radio Shack has slowly foundered over the past few years and always figured it was a matter of time before they too become a relic of a bygone era.

  3. #3

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    I remember hearing that Tandy had bought McDuff's when I worked at Tandy in the very late 80s. SoftWarehouse CompUSA seemed like a threat to Tandy's small store approach and McDuff's was maybe supposed to be a trial-run at Super-Storing before Incredible Universe finally appeared. Not that anyone told us design engineers what their corporate strategy was... we speculated.

    Living in the Dallas area, the local newspapers cover Radio Shack more closely. Newspaper stores of recent weeks were:
    (as best as I can recall

    (1) profits are dropping faster than this time last year,
    (2) the stock bumped up a little on news that the enhanced strategy stores were doing well,
    (3) Radio Shack management floated the idea of Chapter 11 in the bankruptcy courts (that's where a judge has the right of over-ride some of the creditors and authorizes a negotiated new recovery plan --- breaks up creditor deadlocks),
    (4) Radio Shack has been in talks with an hedge fund group (the inference is that the firm that has helped out other companies in a similar state, may provide cash to maybe buy-out the creditors that are preventing Radio Shack from closing stores that are losing so much money; creditors have those stores as part of their secured loans so closing them increases their risks... hence locked horns),
    (5) Radio Shack is now selling Arduino accessories (smart move - though over-priced for those that know better).

    In general, the new Management Group of about 3 years, has some good strategies but the sins of the past, are the boat anchor. Like so many other companies, Radio Shack past thought it could live on sales margins selling other companies' products; ignoring that eventually margins would shrink and deals would not be renewed.

    The Christmas Season will be the condition upon which the next set of decisions are made. The Hedge Fund investment is the most positive move. Past newspaper stories concluded that Radio Shack was hoping that a fair to good Christmas Season would help sway the creditors to let them close more stores... that is why Radio Shack is bleeding money, as I understand it from 45+ miles away.

    I'm hopeful that Radio Shack can turn around.
    Last edited by JDallas; September 17th, 2014 at 02:48 PM.

  4. #4
    Join Date
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    When I worked for Radio Shack in the 1980's, what would save our store's monthly sales numbers were the TV Antenna sales.

    That's not viable now.

    I am at a loss as to what they could do to generate the kind of business they need to survive.
    -----[ Al ]-----

    3 - TRS-80 Model I, TRS-80 Model 4D, LNW-80 Model I, Coco, 3 - Coco 2, Coco 3, 2 - Tano Dragon 64, C64, C64c, C128, 2 - Atari 800XL,
    Atari 520-ST, Atari Mega-2 ST, Amiga 1000, TS-1000, TS-2068, ZX-Spectrum, IBM 5150, 2 - Apple ][gs, Laser 128, and a butt load of Macs and Intel PCs.

  5. #5
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    Growing up, the local Radio Shack was my "go-to place". The catalog was my "bible" which I read cover-to-cover. Like most things as we age, it isn't the same. I miss my old haunt!!!
    Rick Ethridge

  6. #6
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    Radio Shack needs to do something to make the store interesting to enter and shop at. There is a RS next door to a grocery store I visit every week and I am reasonably interested in electronics. I haven't entered the store in the last 6 months. Competing against Walmart and BestBuy with higher prices, lower quality goods, and worse parking is proving not to be a successful strategy.

  7. #7

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    Since the 60's when I started buying parts, Radio Shack has not been a goto place in this corner of the continent. In fact their reputation has always been pretty shoddy when it comes to electronics. . . unless one is talking about ready made stuff like radios and things. I guess it depends on what's available where you live. In Vancouver there's always been a number of actual electronics shops where all they have is bins of tubes, transistors, capacitors, coils, and all that good stuff. Not so much on the tubes these days though.

    When they had their own products (for better or for worse) they at least had a store that wasn't like others. Now what do they have? Nothing that separates them from the others. That said, in a tiny town like Princeton (the one horse town where I shop) there is the current Canadian version called "The Source By Circuit City" (we still call it Radio Shack though) and it does provide a valuable service because it is the only place within several hours drive which carries electronics products. I support them when I can because they're local, good people, and offer great service - but I still get almost all parts from China and computer stuff from NewEgg or similar.
    WANTED: Cardinal 2450MNP modem.

  8. #8

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    Quote Originally Posted by Petrofsky View Post
    I've started thinking about my final Radio Shack purchase. I may go buy one more of the venerable mini-amp (cat. #277-1008, sold continuously since 1967). You definitely want one of those for any Model I/III system, or else Robot Attack won't talk to you.
    Interesting you mention that. After so many years (decades!) just putting it off I finally bought one last week at a NYC Midtown store - one of the small stores revamped with the "bright and sassy" look. The plastic on the mini-amp packaging looked a bit yellow and dusty, like no other customer had ever touched before (nor the staff while cleaning out their displays, if they ever do that), needed the thing for my Maximite BasicBoxx; I might go for a second one mini-amp as they are indeed convenient to have around, as you noted the amp is useful on the good ol' Model Is and IIIs.

    Not too long ago I also re-stocked my parts bins with their LEDs, resistors and caps kits.

    Don't think any quick and dirty solution will save RS. I worked part time on an Edison NJ store back in 2005 and signs of trouble were clearly visible since then. The way the company embraced cell phone sales was a red alert blinker, no attention set on other areas of revenue.

    Maybe if they had paid attention to the middle and high-school students sector, musicians and do-it-yourself tinkerers they could have garnered a repeat customers base large enough to survive rough times on the big ticker items.

    -- RP

  9. #9

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    Quote Originally Posted by Ole Juul
    ...When they had their own products (for better or for worse) they at least had a store that wasn't like others...Nothing...separates them from the others.
    You've hit upon the key mistake Tandy made when they ran Radio Shack.

    When they sold other brands at their higher prices, they were in competition with every other electronics store selling the same merchandise for lower prices. The potential additional market offered by the vast chain of stores around the country was being eroded by giant discount chains like Walmart and others that people were willing to drive farther for the savings and selection. It was foolish of Tandy to think that deal wouldn't collapse and they'd be left living on sales margins.

    What Tandy should have done is re-vamped their own brands and cut the incredible waste in product development. One example, when I was working for Tandy designing Radio Shack products, I was told that only 1 of 4 projects we were given to do, would ever be approved to be manufactured and sold in the stores.

    So why fund the the doomed 75% of all products developed under Tandy? Were they really incapable of making that decision without having a working prototype to play with?

    No other corporation wastes that kind of money.

    Ironically Tandy / Radio Shack were the best in the industry for squeezing cost out of their products and manufacturing - I joined the design team to learn from them. But all that profit advantage was countered incredible waste in the management of product development, populated with a lot of promoted executives without the business degrees to understand their jobs.

    The result were lots of pockets of cost-waste in the way management operated... something that is by the nature of organizations the most protected and hidden cost-waste by management from those higher up, seeking to cut operating costs.

    Tandy cut their own throats by never purging the incompetent executives among their ranks. The damage they did is still hobbling the new management team trying now to save Radio Shack.

  10. #10
    Join Date
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    Beauharnois, Quebec, Canada
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    I miss Radio Shack... Where I live most of the RS store were bought by The Source and became mostly cell phones outlets. Now I have to drive all accross the city to Active or Addisson to get my electronic components or order them online and wait a week...

    I used to buy "surprise" box ar my local RS store when I was young. They sold those for about $10.00 and they were filled with a bunch of mixed components.

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