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R’Shack Expanding Gaming, GPS

In a major shift in its merchandising strategy, RadioShack will expand its gaming, GPS and private-label assortments this year while limiting its flat-panel business to opportunistic buys.

After testing the category during the second half of 2007, the chain said it will roll out gaming products to more than 4,000 stores by year’s end and will have a “core assortment” of products in more than half of those locations. The assortment will include private-label accessories and game consoles “as inventory becomes available,” chief merchandising officer Peter Whitsett said during a conference call last month, and will occupy 40 percent to 50 percent more floor space. Chairman/CEO Julian Day noted, “We are confident that we can get access to any product set we need.”

The chain is also looking to expand its assortment of GPS devices after the category enjoyed “strong” triple-digit growth during the fourth quarter, said chief financial officer Jim Gooch.

The company will also beef up its private-label line of Gigaware-branded MP3 and gaming accessories.

In contrast, RadioShack will reduce its flat-panel TV business, which accounted for 20 percent of last quarter’s overall sales decline. Whitsett attributed the poor results to “issues with the assortment … the number of stores that it went in, as well as kind of the logistics of handling that size of a unit through our supply chain.” Going forward, the company will limit its flat-panel presence to competitively priced “in-and-out” SKUs by tier-one and tier-two vendors that it will use to attach HD-related accessories, he said.

Day added that RadioShack is “working very hard to fix” its Sprint wireless business, which accounted for 80 percent of last quarter’s sales decline.

No significant changes in store count are planned, although the stores themselves will be “de-cluttered” and redesigned for improved self-navigation and an enhanced wireless wall.