R'Shack Outlines Go- Forward Strategy



RadioShack is will look to mobility, connectivity, accessories and its turnkey wireless kiosks as its chief avenues for growth under incoming CEO Jim Gooch.

Those categories can help compensate for ebbing sales and eroding prices of legacy CE products like GPS, digital cameras and MP3 players that are being cannibalized by smartphones, Gooch and his management team said.

Speaking to analysts on a fourthquarter earnings call last month, executives said cellular would remain the company’s primary focus as it positions itself as the local authority in mobility.

Chief merchandising officer Scott Young said the chain plans to aggressively grow the category by giving it first dibs on marketing, labor and floor-space allocations, and by continuing to offer handset exclusives and “very competitive” prices.

As in its non-wireless categories, RadioShack will emphasize bundles and solution-selling in order to create a complete basket of high-margin accessory and warranty attachments. To that end, the company has increased its wireless accessories assortment by 15 percent and reset display areas; is testing a new commission structure and will reemphasize training; and will introduce a new extended-warranty product in the second quarter that bills monthly.

Other growth plays this year include wired and wireless broadband, tablet computers and Internet TV set-top boxes like Google and Apple TV, which promise solid growth and require integrated solutions, Young said. RadioShack plans to get its fair share of those businesses by offering a strong assortment of tablets and demonstrating connected solutions in its top stores.

The chain will still maintain a presence in mature categories like TV and GPS, but plans to maximize their profitability by managing inventory and culling the assortment, rather than pursuing growth.

Elsewhere, the company is looking to expand its turnkey wireless kiosk services to other retailers beyond Target, and launched an optimized m-commerce platform on Feb. 25.

Gooch, currently president and chief financial officer, will succeed Day as CEO in May. During his nearly five-year tenure, Day slashed costs and streamlined operations, and initiated a rebranding campaign dubbed “The Shack” which tapped a younger demographic.

While Day leaves RadioShack with a strong balance sheet, he reportedly failed to find a buyer for the business, and fourth-quarter profits plunged 25 percent to $57 million for the three months, ended Dec. 31.


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