RadioShack files for bankruptcy a second time

[William Gayde]

As e-commerce sales continue to grow, brick and mortar stores are finding it increasingly hard to keep up. This is especially true in the technology market. Websites like Amazon and Newegg have exploded in growth while competitors like RadioShack and Circuit City have withered away in the process. Back in 2015, RadioShack filed for bankruptcy and was removed from the New York Stock Exchange. They attempted to reorganize with the hopes of bouncing back, but the effort wasn't successful. General Wireless Operations, doing business as RadioShack, has once again filed for bankruptcy protection.

Following their 2015 bankruptcy, RadioShack partnered with Sprint to launch more than 1,000 "store within a store" formats in the hopes of expanding their footprint. Thousands of other stores were closed and still more were sold to a hedge fund which took over as General Wireless. This newest filing lists assets and liabilities between $100 million and $500 million each.

General Wireless plans to close 200 of the remaining 1,300 stores. Sprint, which was seen as RadioShack's last lifeline, will be hit hardest by the loss, but stated that it won't have a material impact on their overall sales results. As the partnership disintegrates, Sprint will "convert several hundred doors into Sprint corporate-owned stores." Sprint has plans to transition all affected employees to other Sprint owned stores.

This announcement comes amid broader struggles in the electronics sales industry. Just a few days ago HHGregg filed for bankruptcy as well, with their CEO sharing in a statement that they gave it "a valiant effort." Best Buy also released slowing sales numbers for the fourth time in five years, though the company remains profitable after a successful cost cutting plan that is still underway.

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https://www.techspot.com/news/68467-radioshack-files-bankruptcy-second-time.html

 

[mbrowne5061]

Circuit City still exists? I thought the last one closed years ago?

 

[TomSEA]

Circuit City still exists? I thought the last one closed years ago?

The American stores did. It's a Canadian outlet and still is alive there.

Can't believe Radio Shack is still here. I would have thought that store would have bit the dust around the same time all the video rental stores did.

 

[Wendig0]

If Radio Shack would have gone back to their roots years ago, rather than staying with the cell phone shack business model they're using now, I doubt they would still be in trouble.

 

[mojorisin23]

If Radio Shack would have gone back to their roots years ago, rather than staying with the cell phone shack business model they're using now, I doubt they would still be in trouble.

oh please, death was inevitable

 

[psycros]

If Radio Shack would have gone back to their roots years ago, rather than staying with the cell phone shack business model they're using now, I doubt they would still be in trouble.

They made no attempt whatsoever to compete on price, as if it were still the 80's. While its true that if you need electronic parts of any kind Radio Shack is usually your only local option, customers who are into that kind of thing are more than capable of getting those exotic items online. Like nearly every other store, The Shack became just another walk-in catalog (as me and my friends used to call Circuit City). They even have a term for it now: "showrooming". Not even the discount retailers are safe, either. Last night I saw some guys who looked like they divide their time between CoD and vaping digging through Wal-Mart inventory scanning everything with their phones. If you can save even five bucks it just makes sense to go with online stores, assuming they will pay return shipping if something goes wrong. In fact, some of the online stores have better return policies than their physical storefront competition. Probably the only way something like Radio Shack survives is if they keep small niche shops in large malls that carry both their traditional electronics gear along with refurbished, unlocked gadgets. Other than Apple I can't think of a single well known retailer that sells certified used computers and mobile devices in their real-world stores. This could keep Le Shack relevant in the smaller, less affluent cities that have nothing like a Best Buy. Tandy could also explore the idea of becoming a rural wireless Internet provider, either as a cell MVNO or by partnering with existing regional services that use things like WiMax. There's a huge market not being served: about 20% of America has no access to affordable home broadband. I wouldn't doubt that federal money might be available for businesses who make a real effort to connect those on the outskirts. Radio Shack used to be a favorite hangout of short-wave enthusiasts who pioneered wireless data. Talk about getting back to your roots.

 

[JamesSWD]

Poor RS has been going through cycles of bankruptcy for +/- 20 years. And somehow they keep hanging on. For at least 30 years now, their answer to all their problems was always the same failed answer: Remodel the stores. Their management have been utterly incompetent for decades and they've never listened to all their fans & lifelong customers who've been screaming at them to go back to their roots.

 

[Uncle Al]

Simply put, Radio Shack lost their mojo many, many years ago. You used to find some pretty smart people in there that could walk the walk and really assist you. Now, just your standard know very little sales people, most of whom just don't seem to give a damn. You could tell the serious ones because they were hot into buying their own franchises .... now, they have no idea what that is ....

 

[sac39507]

They need to do what Fry's Electronics is doing: Sell cheap Chinese knockoffs (or "versions" if you want to be politically correct). Selling high price name brand will get you killed. I know because I'd rather buy the cheap Chinese version.

 

[JamesSWD]

They need to do what Fry's Electronics is doing: Sell cheap Chinese knockoffs (or "versions" if you want to be politically correct). Selling high price name brand will get you killed. I know because I'd rather buy the cheap Chinese version.

With the new climate of 'Made in America', I'd rather they source American suppliers. It's finally a growing & popular trend to rebuild our manufacturing base & jobs. I've dealt with too many Chinese & other foreign parts that are pure crap. I can't even buy bolts from Home Depot that don't shear in half while torqueing them down...made in China or elsewhere out of pot metal.

 

[Wendig0]

They made no attempt whatsoever to compete on price, as if it were still the 80's. While it's true that if you need electronic parts of any kind Radio Shack is usually your only local option, customers who are into that kind of thing are more than capable of getting those exotic items online. Like nearly every other store, The Shack became just another walk-in catalog (as me and my friends used to call Circuit City). They even have a term for it now: "showrooming". Not even the discount retailers are safe, either. Last night I saw some guys who looked like they divide their time between CoD and vaping digging through Wal-Mart inventory scanning everything with their phones. If you can save even five bucks it just makes sense to go with online stores, assuming they will pay return shipping if something goes wrong. In fact, some of the online stores have better return policies than their physical storefront competition. Probably the only way something like Radio Shack survives is if they keep small niche shops in large malls that carry both their traditional electronics gear along with refurbished, unlocked gadgets. Other than Apple I can't think of a single well-known retailer that sells certified used computers and mobile devices in their real-world stores. This could keep Le Shack relevant in the smaller, less affluent cities that have nothing like a Best Buy. Tandy could also explore the idea of becoming a rural wireless Internet provider, either as a cell MVNO or by partnering with existing regional services that use things like WiMax. There's a huge market not being served: about 20% of America has no access to affordable home broadband. I wouldn't doubt that federal money might be available for businesses who make a real effort to connect those on the outskirts. Radio Shack used to be a favorite hangout of short-wave enthusiasts who pioneered wireless data. Talk about getting back to your roots.

You're right, and as a ham operator who still enjoys SWL'ing, I'm one of those enthusiasts who made trips to Radio Shack for parts on a (nearly) daily basis. I still try to support other local businesses rather than shopping online if I can, but the cost difference is definitely obvious, and I frequently shop online when I need something that I can't find within 10 miles from home. Recently, a large mom and pop electronic parts store that is local to me, closed their doors after 45 years in the community because it was too difficult to compete with the price and convenience offered by the online giants. I still prefer being able to go hands-on with a product before purchasing, though, and that's something I used to love about Radio Shack. Now, I can't find a decent electronics store within 50 miles.

 

[Wendig0]

oh please, death was inevitable

Many brick and mortar stores are still very relevant, but many become irrelevant when they forget the people who helped them become big names. That's where Radio Shack hurt themselves. When they became more focused on cell phones and migrated out of the niche they were in, many long time customers felt like it was a slap in the face and they stopped giving them business.

 

[EClyde]

What's gonna go first? RS or KMart

 

[EClyde]

I'm going down to the record store. Who's coming?

 

[sac39507]

With the new climate of 'Made in America', I'd rather they source American suppliers. It's finally a growing & popular trend to rebuild our manufacturing base & jobs. I've dealt with too many Chinese & other foreign parts that are pure crap. I can't even buy bolts from Home Depot that don't shear in half while torqueing them down...made in China or elsewhere out of pot metal.

You are correct! Chinese made products are crap but at the end of the day human nature kicks in and some people will do what it takes to save a penny.

 

[texasrattler]

Just so more ppl know and understand, Circuit City is a actual store again in the US. It happened last year and is in Dallas. It's like the size of a Radioshack.
From what I know and can remember, Systemax, CC and TigerDirect all merged and basically became Circuit City. While TD still exists, Systemax was the parent, far as I know still are.

There was a reason why you saw the same prices on CC, TD and CompUSA, all were owned by Systemax.

 

[nickp91]

Even the 80s themed Super Bowl commercial couldn't save Radio Shack

 

[psycros]

With the new climate of 'Made in America', I'd rather they source American suppliers.

This would be a great angle for the brand to pursue but it won't be enough to keep them relevant as a large stand-alone chain. They need to position themselves like Apple and Microsoft with stores in locations where there is a guaranteed level of business. A solid online store would also be helpful, even if its only a sub-site on Ebay or the like.

Even the 80s themed Super Bowl commercial couldn't save Radio Shack

Did they actually try the nostalgia angle? If so, that's the ultimate cry for help. Radio Shack is the Blackberry of retail. For a small but dedicated customer base nothing else will do, but that's not enough business to keep them afloat. The real shame is that nobody will even try to fill the gap left by their passing. Unless either the sell volume or the markup is huge, major companies simply won't produce a product. However, all is not lost as custom electronics are being supplanted by cheap *modular* SOCs like Rasperry Pi and Arduino. There's nothing stopping a couple engineers with access to a C&C machine from building the next great home stereo system or QWERTY-packing phone. In fact, its these types of people who are really the only ones still playing with breadboards and individual components - it makes no economic sense for anyone else to work at a lower level.

 

[oldikes]

All ive seen out of radioshacks the last decade is electronics that cost anywhere from 1.5-2x the price of other retailers.

The fact of the matter is, retailers need to compete on price. That means lowering your cost of running, and having an excessive amount of maybe-competent employees (a trend thats been around for decades) isnt gonna cut it; neither is having however many levels of management and bureaucrats.

I was in a best buy looking at a laptop the other day, and literally 4 employees came up to me within a the span of a minute to ask me what I needed help with (which honestly makes me even less likely to shop there). Having that many people working is an excessive cost - and when I can get said laptop that BB was selling for $700 online for $450 (literally), youd think lowering costs would be priority.