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R’Shack Outlines Go- Forward Strategy


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”

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

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.