The buzz around town (aka the internet) is that Radio Shack’s days may be numbered. Back in September the electronics retailer disclosed a staggering $119 million second quarter loss leaving CEO Joseph Magnacca no choice but to announce that the company was in danger of running out of money. The company has tried several strategies to stay afloat, but some feel the company may be doomed despite its best effort to stick around.
Hopes for a holiday Hail Mary were dismal at the start of December. Standard General reached a deal with investors to get them through the holiday season. With a debt in excess of $585 million, the new investors loaned the struggling company an additional $120 million, money that would eventually convert to equity. The influx of cash allowed Radio Shack to restock its inventory for the holidays but it was a case of too little, too late.
As with competitive retailers Best Buy, Walmart and Target, Radio Shack opened their stores early on Thanksgiving morning. However, unlike the larger and more popular chains, Radio Shack had nothing more to offer than electronics. They were unable to keep up with the deals being offered by their competitors. Anyone looking for computer cables, batteries, or even cell phones were more likely to head to stores where they could find non-technical merchandise. Part of the experience of Black Friday is to get up early and finding the best deals. Radio Shack is more of a necessity rather than a shopping experience.
One way Radio Shack attempted to keep up with the times and gain holiday customers was to completely overhaul its website. By offering free shipping with all online purchases it appeared that things were on the upswing. After the announcement and the roll out of the updated website shares in the struggling company rose by three percent. Sadly, with the larger retail stores offering price matching guarantees it was akin to rearranging the deck chairs on the Titanic.
It was not always bad news for Radio Shack. Founded in 1921 by brothers Milton and Theodore Deutschmann, the retail store catered to those in the ham radio business. A booming catalog business began in 1939 and by the mid-80’s the company saw its heyday with the dawn of the personal computer.
It is sad to think that Radio Shack’s days may be numbered. Gone are the days when you can pop into a store and speak with someone who actually knows their product and how it works, something “The Shack” was really good at. Hopefully things will turn around in 2015. Stranger things have happened.
