radio shack

RadioShack Corporation (formerly Tandy Corporation) (NYSE: RSH) runs a chain of electronics retail stores in the United States, as well as parts of Europe and South America. As of 2003, it has more than 6,000 stores in the USA and reported net sales and operating revenues of $4.6 billion. It will reopen stores in Canada after losing its former subsidiary InterTAN (independent since 1986) to a purchase by Circuit City in 2004. The head office of RadioShack is located in Fort Worth, Texas.

RadioShack's current proprietary brands include Presidian (audio and video equipment), Accurian (audio equipment and video equipment), Optimus (digital imaging products) and Enercell (batteries and power accessories). Discontinued brands include Realistic (sound equipment), and Archer (wiring and antennas).

The first 40 years

The company was started as Radio Shack in 1921 in Boston, Massachusetts, by two brothers, Theodore and Milton Deutschmann, who wanted to provide equipment for the cutting-edge field of amateur, or ham, radio. The store's name was taken from the name of the small structure that housed a ship's radio equipment at the time. ("Radio Shack" also refers to the room where a ham has his/her equipment.^{citation needed]})

The company issued its first catalog in the early 1940s and then entered the high-fidelity music market. In 1954, Radio Shack began selling its own private-label products under the brand name Realist, but was subsequently sued and consequently changed the brand name to Realistic. After expanding to nine stores plus an extensive mail-order business, the company fell on hard times in the 1960s. Radio Shack was essentially bankrupt, but Charles Tandy saw the potential of Radio Shack and retail consumer electronics when hardly anyone else did and bought the company for $300,000. ^[1]

Tandy Corporation

Main article: Tandy Corporation

In 1963, it was bought by the Tandy Corporation, which was originally a leather goods corporation, and renamed Tandy Radio Shack. Tandy eventually divested itself of its non-electronic product lines.

Tandy (through InterTAN) also operated a chain similar to Radio Shack in the UK under the "Tandy" name from the 1970s until the late 1990s. The stores were sold to Carphone Warehouse in 1999, and over the next few years were converted to that format, or sold off.

Tandy entered the Australian market in 1973. In 2001 Woolworths Limited acquired the Australian operations and merged them with their Dick Smith Electronics business. There were over 300 Tandy stores across the country, but most have been closed or rebranded as Dick Smith Electronics.

During the 1960s and 1970s, Radio Shack marketed its free battery card; a wallet-sized cardboard card, free, which entitled the bearer to free flashlight batteries when presented at one of their stores. The bearer was limited to one a month, although many customers would frequent several stores with several cards every month. These cards also served as generic business cards for the salespeople in the 1980s; the "battery club" card was still used until the company-wide changes in the early 1990s.

In 1977, Radio Shack introduced the TRS-80, one of the first mass-produced personal computers. Affectionately known as the Trash-80, the machine became a big hit. In the late 1980s, Radio Shack made the transition between its proprietary lines of 8-bit computers to its line of more-or-less IBM-compatible Tandy series of computers. However, shrinking margins and lack of economies of scale led Radio Shack to exit the computer manufacturing market by the mid-1990s.

Radio Shack had another big hit with products designed to take advantage of the Family Radio Service, a short-range walkie-talkie system. Since the mid-1990s, the company has attempted to move into the consumer small components markets, focusing on marketing wireless phones.

Its slogan since 1994 has been "You've got questions, we've got answers."

RadioShack Corporation

In May of 2000, the company dropped the Tandy name altogether, instead opting for RadioShack contracted into one CamelCase word. The logo had been changed from the '70s-style bullethole lettering to the current stylized R in 1996.

Also in 2000, the company-owned Realistic and Optimus brands were discontinued when the company entered into an agreement to carry RCA products, although RadioShack hasn't made products under the Realistic name since the early 1990s. When the RCA contract ended in 2004, RadioShack added its own Accurian and Presidian brands, and then re-introduced the Optimus brand in 2005 on some low-end products. RadioShack still has its own brand of batteries, called Enercell.

Many RadioShack stores still carry products dating as far back as the 1980s. Older RadioShack products feature the old logo, or an older Realistic or Archer brand name. It is not uncommon to see a few generations of packaging variations on slower moving products ^{citation needed]}.

Until 2002, RadioShack routinely asked for the names and addresses of customers who made purchases so they could be added to the mailing list. Personal information is still requested when purchasing a cellular phone, service plan, mail order part, Direct2U item (which is a fee-free special ordering of a product not in stock), returning an item, or paying with a check. The Seinfeld television program satirized this practice in one episode. ZIP codes may still be requested for demographic purposes.

RadioShack and other retailer partnerships

In August 2001, RadioShack opened new kiosk-style stores inside Blockbuster outlets. The project ended in February 2002 when CEO Len Roberts announced that the stores did not meet expectations.^[2] A more successful venture for RadioShack has been the wireless kiosks the company has been operating since 2004 within Sam's Club discount warehouses. RadioShack purchased the kiosk operations from Arizona-based Wireless Retail Inc. The kiosks are staffed by RadioShack personnel and carry RadioShack branded-merchandise, and have netted among the highest profit per square foot figures of RadioShack's retail operations.

RadioShack sells riverfront headquarters building

On December 20, 2005, RadioShack announced the sale of its newly-built riverfront Ft. Worth headquarters building to German-based KanAm Grund. RadioShack will continue to lease the property for 20 years.

CEO résumé scandal

On February 20, 2006, the company announced that its CEO, David Edmondson, had resigned over questions raised about his résumé. Edmondson had just been arrested for drunk driving when reporters learned that, despite his résumé's claim that he had earned degrees in theology and psychology from the Heartland Baptist Bible College, the school's records showed he'd completed only two semesters and had never even offered a course in psychology. Edmondson, who became RadioShack's CEO in May 2005 after being groomed for the spot, admitted that he had "clearly" misstated his academic record on his résumé and on the company's Web site. RadioShack promised to hire a lawyer to investigate the matter surrounding Edmondson.

Leadership then immediately fell to Claire Babrowski as acting-CEO, chief operating officer and president for RadioShack. She had just joined several months prior, after spending 31 years employed with McDonald's Corporation, most recently as a vice president and Chief Restaurant Operations Officer.

RadioShack had also admitted that 2005 fourth-quarter earnings had fallen 62 percent after a switch in wireless providers led to an inventory write-down. The news sent the company's shares to an almost three-year low.

Major store shutdown

In early 2006 RadioShack announced they were shutting the doors of 480 underperforming stores nationwide. This accounts for roughly 10% of all of their stores in the continental United States.

Store management enhancement initiative

In a controversial and wide sweeping move, RadioShack in early 2004 introduced a program to "correct" inventory and profitability issues company wide called Fix 1500. Fix 1500 simply put was to raise the overall skill level of store managers system wide (5000 +) and determine the 1500 lowest graded store managers who required additional training and coaching.

As a result, a total of 1,734 store managers were reassigned or terminated in a 6 month period, while a set of standard operating procedures were implemented to achieve improved and uniform customer experiences at each store across the country.

Company Restructuring

On Aug. 10, 2006, RadioShack announced plans to reduce its workforce by approximately 400 to 450 positions across its various support functions. Company officials said this action was necessary to reduce the company’s overhead expense and improve its long-term competitive position in the marketplace while supporting a smaller number of stores.

Most of RadioShack’s planned reductions occured on Aug. 28 at its headquarters operation in Fort Worth, Texas. Approximately 400 positions were eliminated and affected employees at all levels of the company

All employees at the corporate headquarters were informed of the impending cut 10 days in advance. During the next week and a half, employees were subject to numerous meetings, updates and individual sessions with supervisors to discuss such things as preparation for job loss and work transition issues. An Intranet site was created to communicate important information to employees, such as benefits, severance details and even such helpful hints as how to save one's personal contacts stored in Microsoft Outlook.

As previously communicated to employees, an e-mail notification was send on the published day and time to employees who's positions were terminated. They were given 30 minutes to finish packing up, say their goodbyes to co-workers and then attend a meeting with their senior supervisors. Afterward, a larger meeting with human resources allowed departing employees to obtain their benefits packages and ask questions of HR professionals. The company even provided vouchers for cabs to any people with transportation issues.

This move drew immediate public criticism for its lack of sensitivity due to news reports that failed to communicate the entire story. ^[1] Within the next week, followup news reports began pointing out how the initial wave of coverage was incomplete, and that upon further examination of the facts, RadioShack's reduction in force process was actually thorough and responsive to its employees needs.^{citation needed]}

Earlier in the year RadioShack announced a turnaround plan designed to increase average unit volume, lower overhead costs and grow profitable square footage. Since the plan’s announcement in February, the company has closed 480 underperforming stores, consolidated its distribution centers, embarked on a cost restructuring program, and liquidated end-of-life merchandise to make room for a new product assortment in its more than 6,000 stores nationwide.

International operations

Operations in Canada

Pre-2005

The Canadian counterpart of RadioShack, also known as Radio Shack, was run by a company called InterTAN, acquired in 2004 by Circuit City. However, RadioShack sued InterTAN one week after the purchase, claiming InterTAN had breached the terms of their agreement. On March 24, 2005, a U.S. district court judge ruled in favor of RadioShack and cancelled their agreement, meaning that all 950 RadioShack stores in Canada must stop using the brand name in any of their products, packaging or advertising by June 30, 2005. As a result, all of the InterTAN stores were rebranded under the name The Source by Circuit City and RadioShack Corporation plans to open its own stores in Canada under the RadioShack name.

Post-2005

After preventing InterTAN from using the RadioShack trademark, the company announced its intention to re-enter the Canadian market itself with a Canadian division. InterTAN is pursuing court action to prevent Radio Shack from using the trademark in Canada until the original 2010 expiry date of the original licensing agreement. The company had planned to have 20 to 30 stores operating in Canada as RadioShack by the end of 2005, mostly in the Toronto area, but progress has been slower than this. As of September, 2006, nine company owned stores had been opened and 16 dealer stores were operating under the name RadioShack, signing new agreements with RadioShack Corporation.

Operations in Australia

InterTAN Australia ran Tandy stores until 2002, when it was announced that Woolworths Limited would acquire them for AUD$114 million and merge them into their existing Dick Smith Electronics business. After the merger, Woolworths found Tandy to be in poor condition and has been trying to rejuvenate that part of the business since.

Operations in France

InterTAN operated Tandy stores in France, selling standard RadioShack brands, Realistic, Optimus, and Archer. Sales people sometimes came from the French-speaking Québec. The French subsidiary went bankrupt and closed by the end of December 1993. Sales representatives blamed this on the practice of selling non-store brands (such as IBM laptops) with margins that were too low.

Operations in Belgium

Tandy stores were introduced in Belgium in the early 1970s. The opening of a Tandy store was usually accompanied by a publicity campaign where free 5-D cell flashlights were given away, with free batteries available through the Tandy battery card. Initially, the Tandy stores only sold their proprietary brands such as Realistic, Archer or Optimus. By the mid 1980s however many Tandy stores had closed however, and by 1990 Tandy had fully disappeared from the Belgian market. In the last years of operation, they also stocked mainstream brands, which made the stores lose a lot of their peculiar character.

Corporate Citizenship

RadioShack's charity of choice is the National Center for Missing and Exploited Children, a nonprofit organization. The organization's store presence is the StreetSentz program, which is a child identification and educational kit readily available to families free of charge.

RadioShack's green initiative involves the Rechargeable Battery Recycling Corporation, in which end-of-life rechargeable batteries are dropped off in-store to be safely recycled. End-of-life wireless phones can also be recycled.

Trivia

• The location of the very first RadioShack store is on Commonwealth Avenue in Boston, MA, and is now the site of the Boston area district office as well as a small RadioShack store.
• The Caribbean district (Puerto Rico and US Virgin Islands) is currently no. 1 in sales and profit.
• The busiest and highest grossing store in the world is also in Puerto Rico, located in the Plaza Las Americas mall, which is also the most profitable mall by square foot in the world.
• RadioShack is currently the leading wireless retailer in the US.
• As of January 1st 2006, corporate owned RadioShack stores are no longer selling Verizon Wireless, and have transitioned to sales of Cingular Wireless and Sprint phones in all markets where it is available (Authorized Dealer stores were still seen selling Verizon Wireless phones as of March 2006). US Cellular or Alltel services may be carried in stores that are not within a Cingular market.
• Before going forward with the closing about 480 of its corporate-owned stores, RadioShack claimed 95% of Americans lived or worked within a 5-minute drive of a RadioShack outlet.
• In the movie Short Circuit 2, the heavily damaged Johnny 5 robot breaks into a RadioShack in order to repair himself. Some people scoffed at this obvious product placement, but it was perfect for the story.
• During the year ended December 31, 2005, the Company had a network of 1,686 RadioShack dealer outlets, including 37 located outside of the United States. An example of a store outside the U.S which is a dealer outlet is Wrexham, Wales, UK.
• In 2004-2005, RadioShack was under the premises of NASCAR's grandfather clause when they and Samsung sponsored a race at Texas Motor Speedway. NASCAR had prohibited the two from sponsoring a Nextel Cup Series event because of Nextel's exclusivity with Motorola; however, when Sprint and Nextel merged, the ban was removed, since Sprint is being sold at RadioShack stores. (The removal of such a ban also helped Best Buy, which would have been prohibited, but took NASCAR sponsorship in 2005, after the Sprint and Nextel merger was announced, and NASCAR approved Best Buy's sponsorship because they carry Sprint products.)

Notes

References

• Irvin, Farman (1992). Tandy's Money Machine : How Charles Tandy Built Radio Shack into the World's Largest Electronics Chain. Chicago: Mobium Press. ISBN 0916371123.

External links

• Official homepage of RadioShack
• Official homepage of RadioShack Canada
• Official history of RadioShack

Business data

• RadioShack Corporation at Google Finance
• RadioShack Corporation at Yahoo Finance
• RadioShack Corporation at Hoover's
• RadioShack Corporation at Reuters
• RadioShack Corporation SEC filings at EDGAR Online
• RadioShack Corporation SEC filings at the Securities and Exchange Commission