RadioShack lives!

RadioShack has made it through bankruptcy and is set to fight another day — sort of. The chain will begin the next chapter in its history as a much smaller company (1,743 stores), stocking fewer items (around 1,000) and sharing banner billing with Sprint at 1,440 locations.

As a Wall Street Journal article points out, the new owner of the company, Standard General, is currently using the RadioShack name. That situation may not continue, however, if it is not able to work out a deal to purchase the name from Salus Capital Partners, which, as the bankrupt company’s biggest creditor, owns the RadioShack banner, patents and intellectual property.

According to a report on the TWICE site, the new stores will initially use existing fixtures and include Sprint store-within-a-store sections. The new stores will only sell Sprint mobile devices. Eventually the stores will undergo a full remodel with an open layout and co-branded signage.

In a press release, Standard General said the new stores "will feature emerging technologies that enhance the traditional accessories, DIY electronics and innovation for which the company is known." It’s co-branded locations with Sprint will "further the company’s strategy of engaging the ‘mobile first’ generation."

radioshack remodel

Joe Magnacca, who was brought in from Walgreens back in 2013 to turn RadioShack around, left the company on Wednesday. While Mr. Magnacca made progress in redesigning stores to fit his concept of RadioShack as the "neighborhood technology playground," coming up with inventive advertising and cutting store inventory, he was unable to convince Salus of the need to dramatically downsize the chain’s store count. It was the weight of thousands of underperforming locations that caused RadioShack to file for bankruptcy in February.

Ron Garriques, a former Dell executive, has been named by Standard General to take over leadership of the new chain.

BrainTrust

Discussion Questions

Is the RadioShack name more of an asset or liability in the minds of the “mobile first” generation that the new company is seeking to attract? What will make the difference between success and failure for the new RadioShack chain?

Poll

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Chris Petersen, PhD
Chris Petersen, PhD
8 years ago

Who still owns a radio? Who still listens to music on a radio?

There is certainly a need for a local technology store that has technology, with all of the wires and connections you need to connect it.

But does anyone from the “mobile first generation” want to go to a “Shack” to shop the latest technology?

Frank Riso
Frank Riso
8 years ago

The RadioShack name will be more of an asset if the stores are set up correctly. They would need to be Sprint stores with a RadioShack DIY electronics section. They will never be able to compete with any form of consumer electronic devices and the Sprint products will be the draw for most customers.

Since most homes have gone wireless for both the internet and house phones a great deal of DIY electronics equipment is no longer needed by most homeowners.

I still think we should all send RadioShack a Get Well Soon card!

Joel Rubinson
Joel Rubinson
8 years ago

I think that name familiarity is underrated and brand positioning guardrails are assumed to be much tighter than what exists in the consumer’s mind. The name recognition of RadioShack is worth a lot.

Also, words in names lose their meaning and just become a familiar term. The word “radio” is just part of a name. When was the last time consumers thought about what “Boar’s Head” means semantically? If they did, would they ever buy those cold cuts?

Mark Heckman
Mark Heckman
8 years ago

While the brand name of RadioShack has become disconnected with their offerings over the past decade, in my mind they still are the place to go if you need components, parts and more obscure needs of the audio-visual consumer.

If their marriage with Sprint and downsizing of SKUs does not diminish this positioning, I think they have a good chance to survive. My gut tells me, however, that RadioShack needs to create a new and better “hook” such as largest selection of “X” or the cheapest place to go to buy “Y” or a lifetime subscription for the replenishment of “Z.” Something of this nature may provide them the “new news” they need to energize their brand.

Ed Rosenbaum
Ed Rosenbaum
8 years ago

The RadioShack name is strong but not exactly relevant today. The new management group will have to get the public beyond what the concept has become—the place to go for batteries and wiring. There has to be a strong draw to pull people back. Maybe then word of mouth will make the name relevant again. It is not going to be easy. There are a lot of good and smart people working at the corporate offices in Ft. Worth. I hope many of their jobs will be retained.

Jerry Gelsomino
Jerry Gelsomino
8 years ago

Except for necessities like batteries, who would make any major purchase at RadioShack, not knowing if they will be around tomorrow to stand behind the product? Major, significant image change is needed.

Jack Kurek
Jack Kurek
8 years ago

Definitely an asset. I still remember going to RadioShack in my Heathkit days to pick up a component (and yes, even occasionally a tube) to fix or supplement something I was building. Nice to see a “legend” live on, even if in a slightly different format.

Ian Percy
Ian Percy
8 years ago

Everyone will have an opinion on the efficacy of the name. Literalists are right—it is seriously irrelevant. Those given to more conceptual thinking point to it still being a household name.

To me going to RadioShack is like going to an Ace Hardware store. Yes it’s smaller and you’re likely to pay a little more. BUT you get to talk with someone who actually knows what they’re doing and who’ll take the time to take you to exactly what you’re looking for. In this big box world where service has pretty well disappeared I’m increasingly finding that refreshing, and more than worth the small extra expense. I hope they live a long and prosperous life.

Carol Spieckerman
Carol Spieckerman
8 years ago

Name recognition counts for a lot and literal deconstruction of the RadioShack banner misses the point. RadioShack’s biggest challenge, and it’s one that will continue to grow, is that its locations are known for selling hardware. As households move to completely wireless solutions, cloud storage, etc., and as competitors like Best Buy and Walmart get better at balancing digital and physical assortments (showcasing high-margin, grab-and-go accessories in store, for example), that’s a problem. It’s quite interesting that a Dell executive has been tapped for the top spot. Dell, the company that went contrarian by doubling down on hardware (PCs) as a gateway to more profitable services and solutions. Hmmmm.

Shep Hyken
Shep Hyken
8 years ago

RadioShack had a name, brand and merchandise it was known for. Then they decided to change to compete with others. They switched lanes. For them to be successful, they must get back to what brought them to the dance. They can’t be all things to all people and they can’t beat the big box stores at their own game. They have to be different. Why go to RadioShack over the others? That’s the question they have to answer. Their name is still an asset, and even with them coming through bankruptcy, they are still on life support. I hope their new ownership and management can bring RadioShack back to the viable company it once was.

W. Frank Dell II, CMC
W. Frank Dell II, CMC
8 years ago

The vast majority of the mobile first generation have never set foot in a RadioShack store. The name will have little or no effect. Most of these people have no image or idea what a RadioShack store is. The challenge for the new owner is to create awareness that the stores even exist.

Bill Hanifin
Bill Hanifin
8 years ago

The RadioShack name is well known among Boomers and Gen X. Maybe it is well known to hobbyists among all generations, but there are plenty of e-commerce sites that offer wider selection and better prices for electronic hobbyists.

While I do believe that RadioShack has a place in the American retail economy, it will be a long road back to prominence. In addition to key decisions about which brands to represent, RadioShack should also think of what it needs to do to consolidate an advantage in the various areas of its inventory which have been fragmented and are currently served by battery, wireless, and related stores.