The Shack no longer on the attack
Once again the iconic Radio Shack (pvt), the home away from home for amateur radio nerds in the 1950’s and 1960’s, looks like it has gasped its last breath, really. The company, which was started in 1921 was close to bankruptcy in the 60’s when Charles Tandy bought the company for $300,000 to add to his leather goods and hobbyist businesses. Radio Shack went through a number of rebranding efforts (Incredible Universe, McDuff, Video Concepts, etc) but didn’t catch on to the e-commerce parts business until 2006, when well established high volume parts suppliers already had a lock on the market.
There were some good times, particularly oriented toward fads in the CE business, such as CB radios and the TRS-80 personal computer, but hard times hit again in the 1990’s, and Tandy sold what was once the largest PC manufacturing organization, along with the Memorex brand name and its leather assets, and began selling the same 3rd party brands that were available everywhere. This, a number of missteps in the mobile phone space, a class action lawsuit by 3,300 current or former Radio Shack managers, and ratings as the ‘retailer with the worst overall customer experience (6 years running) took their toll, despite a $250m cash infusion from Cerberus (pvt) and Salus Capital (HRG). By 2013 losses were over $400m and a proposed restructuring was prevented by creditors, with a formal Chapter 11` filing in February 2015. A month later the court approved a $160m offer from Standard General (pvt) along with a partnership with Sprint (S) who would be a co-tenant in the remaining 1,700+ Radio Shack stores.
Now General Wireless, the entity that runs Radio Shack for Standard General is expected to file for bankruptcy, leading to a liquidation after Sprint backed out of the deal in January, drying up the RS cash flow. According to ‘sources’ General Wireless terminated buying, inventory management, marketing and franchise operations early in February, while shutting its fulfillment center and stopped paying vendors. CEO Dene Rogers said, “We had a decent 4th quarter”, at a roundtable in January, right before the Sprint pullout. Maybe it’s time to give Dr. Frankenstein a rest and let the body stay dead.
There were some good times, particularly oriented toward fads in the CE business, such as CB radios and the TRS-80 personal computer, but hard times hit again in the 1990’s, and Tandy sold what was once the largest PC manufacturing organization, along with the Memorex brand name and its leather assets, and began selling the same 3rd party brands that were available everywhere. This, a number of missteps in the mobile phone space, a class action lawsuit by 3,300 current or former Radio Shack managers, and ratings as the ‘retailer with the worst overall customer experience (6 years running) took their toll, despite a $250m cash infusion from Cerberus (pvt) and Salus Capital (HRG). By 2013 losses were over $400m and a proposed restructuring was prevented by creditors, with a formal Chapter 11` filing in February 2015. A month later the court approved a $160m offer from Standard General (pvt) along with a partnership with Sprint (S) who would be a co-tenant in the remaining 1,700+ Radio Shack stores.
Now General Wireless, the entity that runs Radio Shack for Standard General is expected to file for bankruptcy, leading to a liquidation after Sprint backed out of the deal in January, drying up the RS cash flow. According to ‘sources’ General Wireless terminated buying, inventory management, marketing and franchise operations early in February, while shutting its fulfillment center and stopped paying vendors. CEO Dene Rogers said, “We had a decent 4th quarter”, at a roundtable in January, right before the Sprint pullout. Maybe it’s time to give Dr. Frankenstein a rest and let the body stay dead.
Ad from the 1st Radio Shack store in Boston - Source: QST Magazine 1937
RAdio Shack Ad - 1962 - Source: RadioShackCatalogs.com
Radio Shack Kits - Circa 1970's - Source: bobyewchuk.worldpress.com
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