RadioShack is Going Down

RadioShack in MallJust yesterday, I noticed the stock price of RadioShack.  It was no surprise.  This company has been sliding down a slippery slope for a decade.  But they didn’t have to…

I’m a ’70s kid.  I grew up in a small town, with a small mall.  We had some bigger anchor stores, but the place to be if you were a smart kid, was the RadioShack that sat right in the middle of the mall.  I’ve already written about my first job.  My second job was this… I arrived for my teenage summer job at the family business.  My dad pointed to some boxes in the corner and said, “There’s your job.”

“Unpacking boxes?” I asked.

“Unpack them, learn how to use them, teach everyone else,” he replied.

The boxes were our new RadioShack computer.  It took me much of the summer, to figure out how to set it all up and design an inventory database for the plans, blueprints, specifications for Dad’s land surveying and engineering firm.  I also wrote a user manual and taught everyone how to use the system for a variety of tasks.

That RadioShack computer, the TRS-80, sold at a price that made it accessible for small businesses like my dad’s.  The technology was relatively easy to understand, and the work I did that summer… well, it changed the trajectory of my life.  After that first computer, my dad bought me one of my own (my sister got one too), the Tandy 1000, another groundbreaking computer at an an affordable price point.

RadioShack was my go-to place for electronic parts and advice.  The place was staffed with the very best types of nerds, the ones who cared about the tech and were happy to share the advice.  The last time I went to RadioShack was about two years ago, before the one in our neighborhood finally closed.  On that visit, the counter help was still knowledgeable, but the inventory was lower quality than it used to be, and I think we were the only customers in the store.

Earlier today, Joseph Magnacca, CEO of RadioShack, said, “For the past 18 months we have been working hard on our turnaround plan.”

Maybe this is the problem. The electronics businesses is incredibly fast-moving; RadioShack has become the turtle of the industry.  When they introduced a rebranding effort a few years ago (remember when they wanted to be called “The Shack”), even I cringed at how lame and tired it sounded; like your parents asking you to call them by their first names.

Competing in this industry takes innovation.  Think of all the changes we’ve seen in the past decade from Apple or Amazon or Google.  RadioShack had to be aware that consumers and their expectations were changing.

From my view of the heyday in the 70s and 80s, I think RadioShack should have focused on their core competency, the encyclopedic knowledge of the employees behind the counter.  They knew the answer to a lot of consumer questions.  And when they didn’t, they bounced the question off another colleague in the store.  Once, I even waited while a RadioShack employee “phoned a friend” to get me some advice.  I don’t personally know where this knowledge came from; was it built in RadioShack training programs, or was it just their culture of hiring knowledgeable geeks?  It didn’t matter.  That was the culture, dependably from store to store.

For years, RadioShack was the “genius bar” of not just one product line, but hundreds.  They understood components and systems and how one could influence the other.  As the industry changed, they could have stayed focused on a mission like this, “to offer technology advice, solutions, products and services world-wide, through the convenience of neighborhood-based stores”.  They could have offered in-store or online tech education, they could have hosted hackathons.  They were at the apex of computing, electronics assembly, and even coding for a time.  They could have driven innovation around the world.

Instead they milked the cash cow. They sold roughly the same electronic products they had been selling for decades. When they ventured into online sales, they did it like a catalog, without utilizing the rich knowledge base that was RadioShack’s legacy.  They dedicated too much precious floor space to cell phones, and didn’t even bother to make them live for customers to try.

RadioShack Stock PriceThey lost sight of their culture. They didn’t seem to consider the community of geeks that have always shopped the stores. Geeks didn’t go out of fashion in the last ten years.  Instead of being struck down, geeks have become “more powerful than you could possibly imagine.”  (You know you are one if you recognize the source of that quote.)  RadioShack missed their opportunity to lead.  They didn’t even seem able to notice their long, slow slide until it was too late.  (See stock price graphic.)  A turnaround plan that takes 18 months to produce has very little chance of implementation.  By the time the plan is complete, the market has changed, the stakes have changed, the competitive environment has changed.

The business also had significant competitive advantage in their parts inventory, their regional repair centers, and their historical knowledge of the industry and technology.  It could have allowed them to make one of the world’s strongest reverse logistics plays.  Yet, even while climate change and sustainability have become news of the day, RadioShack’s reverse logistics play – “The Repair Store at Radio Shack” – has faded into obscurity.  A note on the website says you can “visit a RadioShack store for questions about parts and repairs.”  Even with the meteoric rise of the “maker movement”, the store that still sells $3 breadboards (look it up, kids) couldn’t be bothered to lead a community of do-it-yourself-ers.

Recently, RadioShack reduced the store count from 5,200 to almost 4,300.  That’s still a lot of stores.  If I were Jeff Bezos, I might entertain, for at least a few minutes, a possibility of buying the business to establish “Neighborhood Amazon.”  But it would be akin to buying a distressed home.  There would be a lot of refuse to get rid of before hosting an open house.  For the time being, the staff might still be knowledgeable, but the customers just aren’t coming.

I’d love to see a change.  Admittedly, I’m one of those optimists that bought BlackBerry stock after everyone else said they had passed the point of no return.  I’m not sure if the situation with RadioShack is going to change.  I hope that the 18 month turnaround plan, when it’s finally revealed, is worth the time invested.  RadioShack was once a remarkable company – a part of my childhood, of my personal history – so it will be sad for me to see it go.


photo credit: Nicholas Eckhart,

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