Alan Wolf On Oct 1 2012 - 4:00am
R'Shack Challenges Mount In Wake Of Management Vacuum
FORT WORTH, TEXAS — Last month’s sudden departure of RadioShack CEO Jim Gooch after 16 months on the job underscored the ongoing struggles of the iconic CE chain.
His resignation, at the behest of RadioShack’s board, followed mounting losses that reached $21 million in the second quarter, and preceded the company’s third-quarter earnings announcement on Oct. 23.
More striking, his exodus, and the appointment of executive VP and chief financial officer Dorvin Lively as acting CEO, came as the company enters the all-important holiday selling season.
Gooch was RadioShack’s fifth CEO in seven years, and the third key executive to leave the company in six months following the resignation of chief merchandising officer Scott Young in June and the departure of chief marketing officer Lee Applbaum in March.
Like his predecessors, Gooch was unable to clearly define a marketplace role for the 91-year-old retailer, which is still largely perceived as a destination for electronics parts and batteries, and is hampered by an anachronistic brand name.
Gooch followed his former Kmart boss Julian Day to RadioShack in 2006 as chief financial officer. True to his reputation, chairman Day slashed costs and improved operational efficiencies, and also launched a rebranding campaign that rechristened the company “The Shack.
” Day had also reportedly shopped the business around, but was unable to find a buyer.
On the merchandising side, both Day and Gooch marginalized RadioShack’s CE assortment and put their focus behind mobile and accessories. The mobile strategy appeared to gain momentum with the return of Verizon Wireless to its carrier fold, and the company’s selection by Target to open and operate its mobile departments nationwide.
But the plan would be hobbled by growing competition from carrier stores and Best Buy Mobile, by lower-thanexpected earnings from the Target business, and by increased sales of iPhones, which ate into profits.
Lively, Gooch’s interim successor, joined RadioShack in August 2011 from Ace Hardware, where he served as executive VP and chief financial officer. He will work under the oversight of RadioShack’s board while an executive search firm is hired and an internal and external hunt is conducted for the company’s next CEO.