RadioShack To Close 1,100 Stores 423
wjcofkc writes "The decline of RadioShack has been painful to watch, and now CNN Money reports that they will be closing 1,100 of their stores, totaling 20% of their brick and mortar presence. RadioShack has also publicly admitted its current stores are out of date and in need of a massive overhaul. But the number-one culprit has been a continuous slide in sales down a steep slope in the area of mobile device sales. A few years ago, in a bid to expand its customer base, RadioShack made a bid to return to its roots as a hobbyist electronic components retailer. Apparently the extra traffic hasn't been enough to make up for their failings. The article mentions that some of their stiffest competition is coming from online retailers. The big question is, in order to ensure their survival, would RadioShack be better off continuing to phase out their brick and mortar presence while making substantial efforts to expand as an exclusively online retailer?"
Stop putting their name on everything (Score:4, Insightful)
I stopped visiting RadioShack in the mid-90's because everything in it had their fucking name stamped on it in big ass bold letters. I wanted an alarm clock but every single one had "WE'RE RADIOSHACK BITCH" written on the front right next to the time. I hate this in much the same way I hate car dealers putting their dealerships logo on the car I want to buy. I actually made a salesman scrape it off and have it repainted at their expense before I purchased the vehicle.
And (Score:4, Insightful)
Radio Shack would be better off just closing all of their stores and firing everyone, as that would surely make them heroes in the eyes of the American business community.
Nobody in America cares about electronics any more. You could stage a broad daylight bank robbery perpetrated by clowns armed with handgrenades and you'd have a below average chance of getting the average American to look up from their phone.
Anything that leads to massive waves of layoffs, abandoned stores, landfills brimming with brand new discarded products, crying, pain, suffering, bankruptcy, investor fraud, theft, arson, graft, embezzlement, female store staff getting their asses pinched, CNN specials, Piers Morgan scolding us five nights a week and a government bailout is always the better option.
Close 'em all.
Stop Being Something Your Not (Score:5, Insightful)
They have no focused strategy (Score:5, Insightful)
The big question is, in order to ensure their survival, would Radio Shack be better off continuing to phase out their brick and mortar presence while making substantial efforts to expand as an exclusively online retailer?"
Not likely. They have no particular advantage in the online space aside from a recognizable (if tarnished) brand name. What they really should have done was to expand their catalog sales back in the day and become a distributor like Digikey [digikey.com] or Mouser [mouser.com]. I suppose they still could though they are behind the curve. They've gotten into cell phones but no one really thinks Radio Shack when they think cell phones. They sell batteries but there now are specialty battery stores that usually have a better selection and better prices. They don't have the scale or the expertise to compete with Amazon online and they are too unfocused to have profitable retail space. I can't really think of anything where Radio Shack would be my preferred shopping destination.
Radio shack has been trying to be all things to all people and when you do that you don't serve any of them well. They have expensive real estate, small square footage, small selections of products, high prices and unclear strategy. Their advantages are that they are fairly well known and have a lot of storefronts. That's a pretty thin advantage these days. I'm thinking Radio Shack might be a pretty good stock to think about short selling.
Re:Electron Hobbyist store. (Score:3, Insightful)
I think the reality is that hobbyist electronics can all come from hyperspecialist stores on the internet. That's where hobbyists of all sorts turn for things these days.
Re:It Comes Down to Price and Convenience (Score:5, Insightful)
I think convenience is the one thing brick and mortar stores have going for them. I sometimes buy things at the local gas station. They are more expensive there, but they are a lot more convenient.
Re:No place for 'almost', 'not quite' and 'nearly' (Score:5, Insightful)
Radio Shack is already 100x bigger than that niche could ever support
And, having been around and watching in the 1970s and comparing to today, I wouldn't be surprised if the hobbyist electronic niche is 100X time smaller today than it was then.
Re:Radioshack's main problem... (Score:4, Insightful)
The problem is "inventory is expensive". For a store to have a cabinet full of resistors and switches, they have to buy them from the manufacturer, put them in little plastic bags, then send them out. Let's say that parts cabinet cost the store $2000. The store has now lost money until 100 hobbyists have shown up and each bought $20 worth of stuff from it. With as few hobbyist customers as they see, that could be two or more years away. That makes buying it a risky proposition. Then figure that Radio Shack HQ makes every store buy one: that's perhaps $10,000,000 investment that won't break even for two years.
They can't just carry the 3 most popular resistors, either, as their customers have varied needs and require a broad selection. People who buy resistors also buy LEDs, transistors, capacitors, wires, solder, breadboards, etc. So if they're going to carry components, they have to have enough so that they can meet reasonable requests. If they are missing a single essential part, the customer is likely to abandon their entire basket, then go on line to Digikey or Mouser.
Re:No place for 'almost', 'not quite' and 'nearly' (Score:5, Insightful)
I would agree. People don't want to fix that expensive [something electronic], when they already know everything is surface mount, and they don't have the skill to fix it. The cost for the replacement part and tools is higher than the cost of the replacement unit.
We are in a disposable society now. Throw away your old electronics and buy new ones.
There are fewer hobbyists now. I was at one of the Radio Shacks that actually sells components. I spent probably 2 hours doing parts conversions in my head to see what could work, and redesigning parts, because virtually nothing I wanted was in stock. Even for 4 transistors, I spent time going through what they had to find what was "good enough", versus what I wanted. Part of that time, I was restocking their stuff, because things I was looking for were tossed back in the wrong drawers. Not just one compartment off, they'd be in the wrong rack entirely. They tried to help, but they knew more about the cell phones and batteries, than they knew about the components. At least one guy working there knew what a transistor or resistor was. We had a decent talk while I shopped for parts. When I couldn't find something (like heatsinks for the transistors I settled on), he checked the other local store inventory, and then ended up telling me I had to buy it online.
I was looking for another component the other day. I don't remember what it was, but it was something fairly simple. Their site had "Web Only" right the photo. The same for every potentially compatible part.
Re:No place for 'almost', 'not quite' and 'nearly' (Score:5, Insightful)
Blame the MBAs. Every time they take over a niche business, they want to turn it into the business model of the largest generic vendor out there. The Science Channel is no longer science, but looks like every other cable channel. Mini wants to sell bigger and bigger cars. Radio Shack is no longer electronics bits and pieces, but wants to be every other electronics vendor. A successful small business is never enough. The greedy buggers only care about their suicidal rush to the top.
CompUSA (Score:5, Insightful)
RadioShack reminds me a lot of how CompUSA was run into the ground during its final decade of business. You basically had upper management throwing random ideas at the wall hoping to see what sticks (not much). The truth is, companies like these fail because the they are constantly trying to hitch themselves to the latest "bandwagon" rather than focusing on their core business.
With CompUSA, it was a result of them trying to become a BestBuy clone. In doing so, they relegated their core business of computer parts to one or two small isles of video cards, and their tech services devolved into being middle men shipping laptops out for warranty service. They chose instead to focus selling printers (because the ink and cables were high margin), TV's (because they wanted to be like BestBuy), cameras (because most could only be returned to the manufacturer back then, bypassing the store's bottom line or a while), and a shitload of laptops (but only because they could sell TAP on them). They replaced that stuff with such a wide variety of product that sometimes it felt like they had absorbed one of the generic Indian retailers that hangs out in mall hallways selling cheap RC copters, or Sega Genesis emulators. There was even a laughable attempt by the store manager to try and sell this new HD VHS system as being the next big thing, and how the AV quality was better then either HD-DVD or BluRay.
The biggest sign of trouble, however, was TAP (Technology Assurance Program, if I remember correctly). It was basically your standard high-margin warranty extension that most places offer. You can tell when a company is truly screwed because they begin to view these "products" as the only viable source of revenue, and begin training staff to push them as hard as possible. There were times where employees were basically instructed to use fear tactics to sell TAP, where they would play out scenarios for the customer like "You don't want to open this new monitor and find out there's a dead pixel do you? We can't return it if you don't purchase TAP!" Of course you also people like the best salesmen claiming TAP covered practically everything from flooding to divine retribution, when in reality it was basically an extension of the manufacturer's warranty.
The reason I bring all of this up is because the same patterns happened with Circuit City, and now RadioShack. They've confused their core business model with newer shiny opportunities, like cell phones, and service plans. It's fine to expand your business with those things, but it should never push your bread and butter out of the spotlight. RadioShack can branch out all it wants, as long as its stores continue to offer the core services (hacker parts, electronics, and knowledgeable staff) front and center. Since it isn't doing that, it will become another CompUSA.
two words (Score:5, Insightful)
Seriously. I've got two words for Radio Shack:
Monoprice and Digikey.
I went in there to buy some lame battery (CR123 or whatever) and ended up buying like a 30 pack online for cheaper than their ONE battery. Same deal with cables, electrical components, etc.
Oh gee, you started selling Arduino? At the size of Radio Shack, why the fuck can't they get within every $10 of the price of the board online? FAIL...
Re:RadioShack's business model (Score:5, Insightful)
It ain't just that...
Before Online Privacy was even a concept, Radio Shack happily demanded to know my phone number, home address, blood type, maternal grandmother's maiden name, the dog's last vet checkup results, an affidavit from my first girlfriend as to how often she caught me staring at her chest...
The sad part? One of the absolute best presents I ever had as a little kid was that 120-in-one electronics lab kit they used to sell (even the then-brand-new Atari VCS I got for Christmas came in 2nd place... but mostly because I had to share that with the younger siblings).
Re:RadioShack's business model (Score:5, Insightful)
I'm guessing the margins on the cell phone business were pretty good there for a while.
As much as I'd love a retail store where I could buy hobby components, and I'd be willing to pay more than internet prices for the immediacy. Heck, for an individual resistor or whatever, I'd pay double. But I don't think there's enough business there, sadly.
Re:Monoprice should buy them (Score:4, Insightful)
To me, that would be amazing. Alas, I can dream.
As long as the FIRE (finance, insurance, real-estate) economy rewards those who collect rents (literally and figuratively) over those who work to produce profit, we'll have these issues - the cost of having retail presence is not going down, and looks like it won't, absent another financial crisis when the government refuses to bail out the banks.