RadioShack exploring sale or merger with Best Buy?

By on March 26, 2010, 5:32 PM
Yet another electronics retailer might be on its way out, as RadioShack explores "strategic alternatives," including a possible sale of the company. Source familiar with the matter say Best Buy could potentially acquire the chain as it attempts to meet a growing demand for smartphones and other wireless gadgets, such as tablets, which are supposed to explode onto the scene this year.

Although it's still very early in the process, some estimate that RadioShack could fetch around $3 billion in a sale. Even so, sources say the start of an auction is still weeks or even months away. It was also noted that RadioShack might also use its remaining $900 million in cash to initiate a "massive share buyback," or even make an acquisition of its own.

A RadioShack representative declined to comment on market hearsay, while Best Buy hasn't responded at all.




User Comments: 40

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levar said:

Yes please, just go not a fan of Radishack nonetheless just merge with Bestbuy for all I care. Both retailers sell the same Bestbuy alot more wouldn't be surprise it goes, I also received some bad customer service from R, but thanks for the $10 off on my next purchase. They do offer some nice stuff but they always as expensive as ever.

tonylukac said:

I worked for Radio Shack in Los Angeles in 1985. A fad at that time was a 3 inch screen lcd color tv. Deja vu with iPhone. Will miss all their connectors if they go.

Guest said:

I would not give you $3 for Radio Shack.. I have not been in one for years. And Best Buy, don't get me started on them....

Se7enVII said:

A perfect match -- both stores rip off customers anyhow with their outrageous prices.

Guest said:

Despite many fond memories of Radio Shack's past, my recent experience has been that every Radio Shack in my area looks worndown, unrepaired, empty of customers and goods.

I recently sought a pair of 2200uf 16v radial electrolytic capacitors to fix my Samsung TV. It was the work of moments to look up five sources online, but it's a fairly cheap item (0.25 to 0.67 bucks each) and the shipping would be ten times that, so figured why not try a trusty old brick-and-mortar for a change? Off I went on a brief tour of the three Radio Shacks in my city.

Each had recently been through a makeover, the kind where a "sales experience space" is carved out of the forward show floor, said bullpens fenced with the store's sexiest SKUs (cells, TVs, cameras) where the salespeople are supposed to corral their prospective customers and wait for that urge-to-charge gleam to come into their eyes.

Problem is of course, the boys back at corporate got their bullpen by sacrificing half the freestanding shelving on the floor diagram, and by condensing every stocking area to fit in what's left. They also forgot to throw in the actual salespeople, instead hiring combination shiftmanager/stocker/shipping&receiving drone #1 and runner/restocker/custodial drone #2 to greet the customers. Somehow, there weren't any customers....

In each store, once I made my way through the (completely uninhabited) experience space into the (recently and hastily reset) stocking ghetto, I found their entire stock of discrete passives had been reduced to a five by three foot box of drawers. In each store I pulled out outsized drawers and poked through the loose-stacked baggies inside until I was sure there were no 2200uf 16V radials lurking in the mess, then pushed the drawers shut and walked out. In each store the shift staff loitered around the sales counter the entire time, waiting out my visit with that sullen look that says He's Not Here For A Phone So He's Going To Leave Emptyhanded.

I then jumped online and ordered the parts from Jameco, throwing in a little desoldering braid to make the eight bucks shipping seem more worthwhile. Two days later my Samsung worked again, and Radio Shack went back to being a place I never visit anymore.

Like I said, I remember what Radio Shack used to be like. The stores used to be clean, well-lit, friendly and stocked. You walked by a few kiosks up front pushing the phones and toys and found a nerve center of electronics customization and repair beyond it, a nerd heaven of peghooks groaning with surplus as well as stock components, enough ICs and discretes to build your own air-traffic control radar and that cool guy who used to TA electronics at your high school waiting to help you if you got stuck on your project.

Now, it feels like where you pick up an anally concealable cellphone on your way to the county lockup. Kinda...seamy.

Relic Relic, TechSpot Chancellor, said:

I guess my local Radio Shack is better off then most. I don't have a lot of stores in my area and Radio Shack is one of the few I can usually get what I need. Bestbuy being a joke having absolutely nothing and most CSR's recommending I try else where. Guess if they leave or turn into another Bestbuy I'll have to do all my shopping online .

Vrmithrax Vrmithrax, TechSpot Paladin, said:

Radio Shack has been going downhill for years... They only have a remnant of their roots left, with the electrical components and hobbyist stuff that was their bread and butter now being a small section in the back of the stores. They expanded far too much for their niche market, have tried to pull themselves into the mainstream electronics markets, but just end up a poser with prices that are often ridiculous for what you get. They have just wandered too far from the path, and seriously, who in the corporate leadership thought that opening all those stores in malls (with their massive lease rates) would be the way to go? It's a case of poor leadership and a loss of the identity that made them a household name for years, so maybe being bought out is for the best. And you can love or hate Best Buy, but they really do have a consistent business plan and their own chunk of market share, which is saying something in this day and age of online shopping.

Baldanders said:

Never posted here before, but I can't resist commenting on the impending demise of Radio Shack. The post above by Vrmithrax sums up the company's present-day situation quite well. It used to be an electronic hobbyist's paradise, well-stocked with a large variety of caps, resistors, transistors, breadboards, soldering irons, etc. Now it's just an overpriced cellphone and electronic widgets kiosk with a vastly pared down electronics component department in the back.

But my biggest gripe with Radio Shack is with the large number of amazingly rude customer reps. I'm not talking about a single incident, but a string of rude and nasty behavior I've encountered from clerks and sales people stretching back from the early seventies to only a couple of years ago. A thuggish salesman once refused to refund my money for a defective cassette tape and stood in front of me pulling half the tape out of the shell looking for the bad spot. One time a clerk accused me of not knowing what I was looking for after I asked him for some help on a microphone cord. When I told him I'd bring back a part if it wasn't correct, he turned his back on me and said he hoped he wouldn't be at the store when I came in! None of this behavior was from my attitude, as I was polite and deferential. And those are only two examples out of several bad incidents. Absolute worst "customer service" I've encountered anywhere (though I also dealt with some perfectly decent sales people at other times).

Best Buy is way too high on electronic accessories, so I rarely shop there. I don't see the logic in a merger, as Best Buy far outstrips RS in quantity and variety of goods, and I doubt that Best Buy would devote any great deal of space to electrical/electronic parts and tools. Between the horrible encounters with clerks and its parts-starved modern incarnation, I can only say "good riddance" to Radio Shack.

Guest said:

I would like to see Radio shack turned into a sort bestbuy/overstock/microcenter/tigerdirect/refurbished outlet of some sort. Would be nice to get some geeky stuff locally.

The market for specialized capacitors and such is all online now, There is not enough of their "old" customer base to support their rent.

peas said:

Radioshack carries some useful electronics parts, but their customer service stinks. Their goods are almost always overpriced too.

captaincranky captaincranky, TechSpot Addict, said:

My Name is Cash, *****... Now Please Take My Money...

Radioshack carries some useful electronics parts, but their customer service stinks. Their goods are almost always overpriced too.
The part I used to "enjoy" most, was the interrogation for all your personal information, before they would ring up a 10 cent resistor.

That said, the only lie I had to tell to move the story along was, "10 cent resistor". Like that would happen at Radio Shack

red1776 red1776, Omnipotent Ruler of the Universe, said:

I have been amazed for years that Radio Shack remains in business, on the rare occasion I walk into one ,I feel like I have been transported back to the mid 70's or a Schaak Electronics store. It also pisses me off that to buy that "10 cent" resistor they want your address,phone #, dogs name , and the size of your shorts. They just have that 'icky' K-Mart feeling about them.

Tha General Tha General, TechSpot Paladin, said:

Radioshack is way worse then best buy when it comes to prices, trust me. I only shopped at best buy a few times, but the main problem with best buy , they never have anything i want in stores, everything is online and most items online is super super high.

If they go, who cares.

Tha General Tha General, TechSpot Paladin, said:

Best buy ftw

LightHeart said:

The Shack

Like most of the other posts I have fond memories of Radio Shack being a hobbist store. I remember buying and building electronic kits, crystal radios, strobe lights, etc. They used to have some really cool things. Today they are a fraction of what they were in their heyday. The stores located in large malls seem to be the worse ones and don't really offer anything special. There is a store in a small shopping plaza that is bit more toward the stores of old but alas it's just not the same as years ago. At least Radio Shack still knows what a soldering iron is.

Guest said:

You know...the RadioShack stores would be an ideal location for GeekSquad specific satelite stores. They could still sell the smaller parts and showcase phones, but realistically actually do some work and - even better - if you have questions, hopefully you can finally get some answers. (The Geek Squad around here is pretty good, I work with a few people who part-time there for extra cash.)

RadioShack by itself wouldn't be very relevant, but using the stores to expand BestBuy's Geek Squad might be an optimal solution.

Guest said:

My how times have changed. I remember when "Radio Shack" (the old name) was the place to go for parts to build projects and fix things. Sadly, most electronics these days are throwaway and the idea of building an electronic project is alien to most kids. Add to that the prices "The Shack" now charges for simple parts and I can see why most electronics hobbyists don't bother with them any more. I will miss them if they go away but I won't be shedding a tear.

Guest said:

atleast when i go into Radioshack someone is willing to help me find what i need. all i ever get in Bestbuy is oh thats not my sections you'll have to find somonelse. or points and says its over there talk about bad customer service!!!!

captaincranky captaincranky, TechSpot Addict, said:

RadioShack by itself wouldn't be very relevant, but using the stores to expand BestBuy's Geek Squad might be an optimal solution.

I suppose, but that would make so much more work for us. After the first bill, everybody that went there to have their computer fixed, would be back here asking for help.

Guest said:

Hello everyone. I am currently a salesperson at a Radio Shack in California. There is no money to be made on small electronic parts, connectors, adapters, or any electronic accessories anymore. This is the reason why The Shack is focusing mainly on cell phones. 40 million phones were sold last year from our combined 6000 locations.

I also hate the interrogations we put our customers through at check out but thats the way corporate wants it. From service plans, name, address, email, phone number, its just too much to throw at customers. Costomers get upset about the process all the time, and its also uncomfertable for me as a sales person.

I think if Best Buy bought out The Shack it would be a good thing. If They could turn it into BestBuy Mobile and somehow incorporate the geek squad into the equation, it would be a great place.

Vrmithrax Vrmithrax, TechSpot Paladin, said:

It makes me wish there were more Fry's Electronics around the country... Those guys have the right idea, a massive selection of hobbyist and electronics parts, but with so much other big item inventory that the profit margins even out. As the salesperson above mentioned, you can't make money on the small parts, particularly when they have to be way overpriced when compared to what you can order online or from somewhere like Mouser or Newark. At least with a place like Fry's, they don't care about making big markups on the stuff, so the prices remain pretty reasonable.

Guest said:

I work at a Radioshack as well and I can definitely understand why some people don't like us. I think the staff we have at our store is very friendly. But folks, when you try to return something that was purchased seven months ago or has obviously been mistreated, then don't expect that you'll get your money back. It's common sense people. And believe me, I hate asking for people's personal information. If they're getting a battery or something really small, I usually just ring em up and sent them on their way. It puts both parties in such an awkward position if you ask for their phone #, name, address, and e-mail. Oh yeah, and don't forget our battery specials! :P It's too much.

Like the other Radioshack employee said, it's all about cell phones now. The highest commission is made off of those sales. The focus has been narrowed and other aspects of sales have been neglected. But that's corporate's business decision and it seems to be paying off for them. I just hope I can get out of this business ASAP. :P

Guest said:

I do care what happens because Radio Shack would think nothing of throwing their franchises under the bus. I have a family member who owns one of those stores and bends over backwards for the customer. I have seen R/S literally stiff these franchises for the last few years. If you sold prepaid cell cards, cell phones, etc. you made a good profit and were able to keep other prices low. R/S decided it wanted a big piece of the pie so made contracts with the provider forcing their franchise stores to fall in line and were cut off from the provider of the cell service. First thing to happen was profits were drastically cut - you were told sell the accessories. Of course it takes around 3 months before you ever see any commission instead of the timely month from the provider. Then when you found the cell phones at a reasonable rate elsewhere they put tracking numbers and said no, you have to buy from us or you can't sign up customers. Okay, again, losing money. Then they do their favorite thing. Sell you a phone, say for $199 and promptly put it on sale for $150 or less. Not just phones either, this occurs on many items. It is especially bad during Christmas time. I saw this family member lose thousands with items at very little, if any profit margin and still had to make payroll, utilities, store rent, etc. But, I think the worst was in their dirty trick of sending hidden among all the paper work for their recurring shipments, thousands of dollars worth of junk. Apparently clearing out their warehouse of items they couldn't sell, ear buds, cameras, etc. that a small store could never hope to sell because of the huge numbers. Then, of course, came their hand out saying we want paid now! Did I mention that nothing is returnable under $35? They say they give you an "allowance" to compensate for items under that amount that doesn't work. Comes nowhere near compensating. Course the junk they sent were/are not returnable at any cost! Their favorite habit is selling you an item for any amount, even $100, and putting it on clearance for $34 so you are stuck after you paid $100!

Last franchisees have been warned through memo's, e-mails that they are not to talk to other stores, media, or even family members. Franchise stores are independently owned and honor everything they sell, offer service, and help in other ways. The name R/S brings customers in but too bad R/S has done nothing for them.

captaincranky captaincranky, TechSpot Addict, said:

I work at a Radioshack as well and I can definitely understand why some people don't like us. I think the staff we have at our store is very friendly. But folks, when you try to return something that was purchased seven months ago or has obviously been mistreated, then don't expect that you'll get your money back. It's common sense people. And believe me, I hate asking for people's personal information. If they're getting a battery or something really small, I usually just ring em up and sent them on their way. It puts both parties in such an awkward position if you ask for their phone #, name, address, and e-mail. Oh yeah, and don't forget our battery specials! :P It's too much.

Well, having done some time in retail electronics sales I do see your issues. Personally I strive buy exaqctly what I want, and try to avoid returns. People are people, and your problem is shared with all businesses, hence the arrival of "restocking" fees. This for nitwits that return big screen TVs the day after the Superbowl, and other classless individuals.

Myself, if I damage something, I eat the damages, and try to do better the next time.

With the current state of disposable electronics, it's actually sort of a miracle the "The Shack" has made it this long. I think the comments about cell phones is appropriate. Radio Shack, has been lucky in that people these days can't seem to keep their mouths shut. Surely, no one could afford a computer built from components purchased from Radio Shack, or for that matter Best Buy either. And finding someone that could or would actually take the time and effort to build a Heathkit, fuggeddaboutit...!

neilgoldman said:

Best Buy needs radio shack to deplete any 3rd party competetition in the wireless handheld retail market, from companies such as target, Walmart, hhgreg. i heard nytimes report the joint venture between the two would cost best buy an estimated 3billion$ i get the feeling they need each other not only the interm but long term as well.

Guest said:

Radioshack can be a little more expensive, but associates for the most part are more knowledgable. When it comes to mobile phones, they want to buy Radioshack out because they are the cheapest. Rs is cheaper than Best Buy, Walmart, and the Carriers. Also, all instant rebates. Best buy doesn't like Radioshacks low phone prices and will buy radioshack to stop it.

Guest said:

being the manager of a store i also can agree somewhat to what some people do say and feel about the shack but however may i point out that everyone remembers the old shack for what is was a place for certain groups of people to gather small electronic parts and kits to biuld there own stuff. BAck in a time when stuff was still american and there was money to be made how many small electronics only stores are still in buisness????? I get the same story all the time i used to go to so and so and get what i needed is that place still around and 9-10 times the anwser is no stores in that market the average customer buys less than 100 dollars a year and shops less than 5 times.....hmmmmm i wonder why we as a corp. decided to go another direction and yes most of our prices are a little high but again i would say that 7-10 employees now more about the products than our consumers do. Or most of our customers have no idea about all the options and can and cant dos of there product. I think to combine the 2 would be depending on how it is handled a great place to find the newest products and people who know how to use and or hook them up. You normally dont go into a radioshack and say i know how to do this i dont need your help if you did everyone would shop either online or at best buy...abc wharehouse ect. This is why we are still here and growing.

Guest said:

Hey people are just getting to cheap that's why electronics just aren't good as they just to be that's also why all the other electronic stores have gone out of business before u know it walmart all be tbhe only store that all be left u know how much money is made on a tv that's on sale ure lucky if its 5% of cost....

neilgoldman said:

they have beeen unable to find a growth strategy for radio shack which is facing mounting competition from best buy wal-mart carriers and mass-merchants, radio shack is looking to sell itself to private equity investors or be swallowed by top electronics retailer best buy.

neilgoldman said:

this week radio shack begins to sell apples iphones in their stores in; fact with 3.000 stores selling iphones, radio shack has the most store-fronts stocking the popular smartphone.Wal-Mart sells about in 2.500 stores and best buy operates in just over a 1.000.

Guest said:

I have worked for an independently owned Radio Shack Franchise store for 23 years. I will admit that Radio Shack has attempted to lead us away from the core products that brought in our customer base of do-it-youself geek type people. But as an independent store we can and do order many products from other suppliers for better prices so we can stay competative with wal-mart. I wish I could make excuses for the bad customer service but I can't. There have been many stores in small towns in our state that have closed because the people running them were a**holes. I am extremely proud of our customer service record in our store. 90% of the time our customers leave happy, even when returning a product. We go the extra mile to get the customer what they need if we don't have it. We don't have 10 cent resistors any more but they're still under a dollar. When you feel you haven't been treated fairly or helped by a sales associate to your satisfaction, you really need to tell corporate about your experience. Only the customers can help to make the improvements needed within the Radio Shack Corporation by keeping management informed about our short fallings. Be pro-active!! Get your dream Radio Shack back! Help us help you!

tipstir tipstir, TS Ambassador, said:

I had managed a couple of RS and Tandy Computer stores in South Florida in the past. I would not want to go back into that nightmare company. I had taken two weeks off and they're suppose to pay me for them. But the slick way the company did business I got cheated. Before I had left the District and Regional Managers offered me a sweet deal to stay and I would get a brand new store anywhere I wanted. I still turned them down. By doing so the District Manager lost his title was now a store manager and was given a store in another county. Still I look back and how I ever worked for them. I really don't even go into the store anymore. Best Buy not the same to me. Seems expensive and the deals are iffy.

Guest said:

Then why bother posting?

captaincranky captaincranky, TechSpot Addict, said:

Then why bother posting?
Indeed. We should say the same thing about you, probably more so.

neilgoldman said:

the thing with radio shack is their a nice company but fail to cater to the masses its like the president of the shack said \these days its all about handheld wireless devices \ best buy could easily fall victum to more main stream mass retailers like Wal-Mart in terms of phone subcribers they would be wise to pick up the shack to withstand any outside competion in the wireless device realm sorry best buy, mobile best buy isn't gona cut it.

Guest said:

The Problem with all of you is that you wish everything was free, I want 10 phones since they are free Why can't i get a free phone? Are you kidding me. Everyone is looking for the next cheap thing, if you want cheap things that will last you 1 week or a month buy on from ebay and stop complaning. I work for radio shack for 10 years and i get customers coming in here wanting me to make their school project for them, Look i gotta make a living I cant spend 3 hours trying to build your project and make $5 sales out of it. You want to build a project do some research "internet" find the parts that you need so that once you get to the store we dont have dont have to do the research for you all we have to do is find your parts and you'll be on your way out.

Cell phones are the cheapest you will find at any retail store, I have had about 10+ phones since i started working at the shack, and i have never lost one or broken one and i get discounts. customers espect that phones should last for ever even when they abuse it by dropping it on concrete or pool of water, then they come in and espect to have another phone for free no charge. If that was the case why not just order 100 phones I mean they are free right? Stupid stupid stupid. Anyway they are some customers who understand the retail business and they just come in and be on their way if you dont like to give out your name then dont you are not being force to, but when you don't have your receipt with you and we cant find it because you never gave us your name dont cry about it deal with it. Next time you shop remember the more info you give us the easier it will be the next time you need to return an item.

I love helping customers but i hate to be expected to have to deal with rude customers who comes into the store all ready to start yelling. I'll try to help anyone even if you are rude but if your attitude continue the same way as when you came in I will kick you out of the store and be happy that you will never come back ever again, i rather not have you as a customer.

neilgoldman said:

First;do you have any facts to back that up? 2; i heard some bloggers say radio shack has some of worst customer sevrivce on the planet from having to give them your dogs name adress phone # and the size of your shorts for a ten cent resistor its a case of poor leadership and a loss of idenity that made radioshack a household name..

Guest said:

May 11, 2010 found out yesterday at staff meeting at Best Buy... company is NOT buying RadioShack.

Guest said:

the shack is watching....

Guest said:

Alot of people have bashed radioshack over and over again, but it is clear that these people are just ignorant. By looking at the numbers in terms of profit, Radioshack is one of the leaders in the industry. Not to mention it is a 3 billion dollar company that employs 35k plus employees and has been operating successfully for many years. Just because radioshack has abandoned the geeky project customer base, doesnt mean it is failing, it has adapted and moved on to bigger and better profits by targeting wireless customers. Making about 50 percent profit on the wireless customer and earning residuals as well changes the face and the entire strategy of the company. Customers can lack, but all the store have to do is sale a couple phones a day to stay in business and not to mention, they do quite well with other products as well. For those of you that havent stepped foot in to a radioshack in years, i suggest you do so. Everyone in the company from the CEO to your average sales associate knows where the money is and that is in WIRELESS. By training its employees thoroughly on its wireless carriers, and giving great commission based pay to them as well, no one should walk into a radioshack without getting a cellphone offered to them. With this type of motivation, training, profit and low prices on cell phones, I see radioshack a steady and firm player in the wireless customer field.

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