News of RadioShack filing for Chapter 11 is not a shock to many industry veterans and observers — and consumers — who began predicting this outcome several years ago.
But similar to when an elderly family member or friend, who has been in ill health for years, finally passes, you still shake your head and shudder at the news.
The initial plan announced Friday makes a lot of sense: Standard General’s General Wireless will acquire 1,500 to 2,400 RadioShack stores, co-brand them with Sprint and feature store-within-a-store shops under the carrier’s brand name. Sprint would bulk up its retail presence in the U.S., doubling its retail footprint. The remaining U.S. stores will be sold off or closed.
Looking to the future, this is a great move for Sprint, as well as its existing and potential new customers.
How RadioShack got to this point is another story.
Whenever a retailer goes out of business, the usual take is to lambaste, and I’ve done my fair share of that over the years. But I personally don’t have the stomach for it this time around since the RadioShack story is complicated. It can’t be reduced to a few sound bites and finger-pointing.
While the various management teams at RadioShack made plenty of mistakes over the years, execs there were able to successfully adapt with a changing industry many times in the past 30 years.
When I first began covering CE back in the 1980s at the old HFD, the leader of its “Focus 200” — a list of the industry’s top retailers — was RadioShack. Under the direction of John Roach and Bernie Appel, the ubiquitous stores — both company- and owner-operated locations — offered a catalog of components, accessories and Realistic-brand merchandise, and only Realistic merchandise. And, as the industry’s only national retailer, it produced tons of sales and profits.
Under the Tandy corporate name (today’s RadioShack Corporation), the chain stepped up in the late 1970s and early 1980s and became one of the leading suppliers of home computers as the PC revolution began. (My first MS-DOS computer was a Tandy laptop back in the late1980s.) RadioShack also was a leader in selling home corded and cordless phones, boomboxes, Realistic color and portable black-and-white TVs, VCRs and the like.
By the 1990s, with the emergence of publicly held CE retailers — Best Buy and Circuit City most notably — Tandy decided to begin to carry brand-name CE products and move away from just relying on RadioShack’s small store format because that’s what consumers wanted.
They saw Microsoft’s Windows format dominating the PC market, cellphones emerging as a market force, and HDTV catching on. Management opened a variety of chains in a variety of styles to meet the new marketplace.
Tandy tested the water by acquiring McDuff Electronics and VideoConcepts in 1985, but then followed with a boutique chain (The Edge in Electronics -1990); the gigantic “event” format (Incredible Universe – 1992); and a specialty computer chain (Computer City – 1993).
Eventually after spending a hell of a lot of money and time, all of those chains closed. And the criticism began. Many said, and rightfully so, that Tandy should have changed the name from RadioShack to another name that would resonate with a new generation.
Maybe they should have just expanded under the RadioShack brand and built bigger, more diversified superstores to compete directly against Best Buy and Circuit City.
But RadioShack was still generating oodles of sales and profits with the old format.
Then Len Roberts came in during the early 1990s, a veteran of the fast food business, and changed the nature of RadioShack by opening up branded boutiques within the store. (Sound familiar?) Among the ones I remember are Microsoft, Verizon, Sony, RCA and a few others.
The new format was a smash success, innovative, and the chain was thriving.
But then Amazon entered the scene, along with Internet retailing, Apple reemerged with the iPod, iPhone and iPad and opened its own online and brick-and-mortar stores. Wireless carriers opened their own stores.
RadioShack, which had an outrageously popular catalog over the years, should have been an early innovator in Internet retailing, like it had been in introducing PCs in the late ’70s and early ’80s. But management didn’t make the move. The Great Recession hit and hurt every retailer, including a flawed RadioShack. By the time CEO Joe Magnacca came in, it was too late for him and his imaginative management team to turn things around.
RadioShack proves again that retail operations are living things and that nothing lasts forever, especially in CE. RadioShack leaves a complicated legacy.
Accentuating the positive, many got their first experience building their own CE products with their components. Others got their first shot at running a retail business, and learning how to take care of customers and manage people.
One hopes that the new General Wireless operation will still show the wonder of CE products and provide well-paying jobs — or at least a ton of practical experience — to today’s workforce.
Steve Smith is editor at large of TWICE and was its longtime editor in chief.
