RadioShack: Relevant or Not
Back in August 2009, RetailWire reported on RadioShack’s plan to remake its image with its "The Shack" campaign. The company, rightfully so, came to the conclusion that it needed to do a better job of relating to modern consumers. In short, it needed to find a way to become relevant, even if becoming cool was probably out of the question.
Nearly three years later, it’s safe to say that RadioShack is still trying to find that connection with consumers. The company has just suspended its dividend on the heels of posting its biggest quarterly loss going back to 1996.
Fitch Ratings downgraded RadioShack’s credit rating, as well. According to a Wall Street Journal report, Fitch concluded, "There is a lack of stability in the business and no apparent catalyst to stabilize or improve operations."
RadioShack CEO Jim Gooch expressed disappointment in the company’s ability to maintain better margins but said the company was pleased with sales in the mobility category.
"We saw incremental improvement throughout the quarter as we successfully connected with our customer base and drove sales growth in this key category through effective promotions and the expansion of our Target Mobile centers," Mr. Gooch said in a statement.
A MarketWatch piece by Angela Moore summed up RadioShack "as a great place to buy cords and cables of all stripes, batteries and various adapters and odds and ends — but not exactly the go-to place for a large purchase. Service is considered to be indifferent at best." Ultimately, Ms. Moore concluded, the chain has "done a poor job of giving customers a compelling reason to come to stores."
- RadioShack Reports Financial Results for Second Quarter 2012 – RadioShack Corporation
- RadioShack (AKA ‘The Shack’) Seeks New, Hipper Image – RetailWire
- RadioShack Still Suffers From Old-Fashioned Image – The Wall Street Journal
- RadioShack disappoints everyone – MarketWatch
Discussion Question: Are RadioShack’s problems of its own making or are they symptomatic of the challenges facing all retailers in the consumer electronics space today? What will it take to improve RadioShack’s sales and profits?