There is a lot of static on the dial at RadioShack. The struggling electronics retailer operates more than 4,000 stores in the US, Mexico, Puerto Rico, and the US Virgin Islands. Its shops and website offer a variety of products, such as wireless and residential telephones, computers, DVD players, and radios. For mobile customers, the company sells third-party wireless calling plans from AT&T, Sprint, Verizon, and others. RadioShack stores also sell a wide range of electronics parts, batteries, and components. It sold the unit that operated more than 1,500 wireless phone kiosks located inside Target stores. After several years of falling sales and amid intense competition, particularly online, the company filed for bankruptcy in 2015.
In April 2015, after a bankruptcy court allowed Radioshack to sell its intellectual property rights to General Wireless (an affiliate of Standard General), the large telecom purchased inventory and assumed leases of 1,743 RadioShack stores for $26.2 million. About 1,440 RadioShack stores would be co-branded with Sprint, with the remaining stores operating as RadioShacks.
RadioShack operates three US distribution centers that ship products to its US retail locations and dealer outlets. One serves as a fulfillment center for its online business and as a distribution center responsible for shipping store fixtures to RadioShack's company-owned stores in the US and Mexico.
Prior to selling its Target Mobile business in 2013, the company reported its business in two segments: US RadioShack company-operated stores and Target Mobile.
Based in Fort Worth, Texas, RadioShack is a global business with operations in the US, Mexico, Puerto Rico, and the US Virgin Islands.
Sales and Marketing
RadioShack operates US company-owned stores and dealer-owned stores, as well as company-owned stores in Mexico. The retailer also enlists the help of international dealers to peddle its products and sells its items online through radioshack.com.
Under the leadership of a turnaround specialist with experience at Safeway and Kmart, RadioShack undertook a major rebranding effort to modernize its dated image. It dropped the antiquated term "radio" from its brand and adopted the nickname "THE SHACK."
Note: In late 2013, the company changed its fiscal year end from December to January, so its 2014 results -- $227 million -- represent only one month.
Efforts at updating its brand notwithstanding, revenue at RadioShack has fallen steadily since 2010. In 2013 it dropped another 10%, from $3.8 billion to $3.4 billion, due to declining sales at existing stores and the loss of sales from its Target Mobile business and about 100 closed stores.
The years of falling revenue have caused four years of net losses, including 2013 when it dropped another 65%, from a loss of $139.4 the previous year. As the brand continues to suffer, impairment of assets and goodwill rises. A decrease in inventories, accounts payable coupled with deferred taxes lead to a $79 million increase in cash from operations, a number which has fluctuated of late.
Amid declining sales, in March 2014 RadioShack announced it will close as many as 1,100 underperforming stores, or about 20% of its locations, after closing 1,700 locations in 2013.
Unlike its big-box competitors, RadioShack has built its chain with smaller but more numerous locations. (Its stores average about 2,470 sq. ft.) The company's kiosk business is an extension of that strategy.
Looking to amend its arrangement with Target in late 2012, RadioShack ultimately ended its relationship with the discount retailer in April 2013 and terminated their contract. Wireless continues to be the growth story at RadioShack, despite its hurdles. Demand for wireless products and services has given the chain, which is known for gadgets and batteries, a profitable new line of business. It's working hard to establish itself as a leader in mobility products and services and update its stodgy image. RadioShack stores offer rate plans from most third-party carriers. The stores also offer smartphones, including Apple's popular iPhone.