In the words of esteemed Forbes contributor Larry Downes, Radio Shack is going out of business…slowly.
Today the company reported a loss of $21 million in the second quarter of 2012, and it suspended its dividend. Its debt was downgraded to CCC, which is two notches above toilet paper. The stock is down 30% this year to $2.50. It was $30 five years ago. In January it suspended its stock buyback program. The company has been mishandled over the years by cost-cutters and short-term thinkers, even supposedrock star turnaround types, and a devil’s pact with second-tier wireless carriers (hello, T-Mobile and Sprint) to re-sell their services and subsidize their handsets. “Our primary operating focus,” said its CEO James Gooch on Wednesday, “continues to be on stabilizing gross margins and aggressively managing our cost structure.”
No. Wrong answer. I have a modest proposal that could rescue the company (or at least put people back into the stores and put smiles on the faces of the downtrodden folks who work there). Stop selling phones. Stop selling TVs. Stop selling flat-screen TVs and crappy stereos. Stop with the tablets and cable boxes and game consoles and universal remotes and all of the other stuff you can get at Best Buy, Amazon or Wal-Mart for the same price or less.
The solution outlined at Forbes is all about go all-maker-all-the-time…
It’s time to get out of all the leases of the smallest locations (at some point having 7,300-plus locations is more liability than asset, no?) and narrow down to just your biggest locations. Then turn them all into TechShops. That’s right. TechShops.
..Radio Shack, you need to do this. Unleash innovation. Hire underemployed shop workers. Give skills to underemployed people. Become shop class for school districts that are cutting shop class. Host a few Obama-Romney photo opps. You’re already hip to the Maker movement, and have been all along since the first store opened in 1921. You already have your own DIY web site, you make the scene at Maker Faire and science competitions and you’re already sponsoring something called the East vs. West Hackerspace Challenge, with the winners getting a $1,000 gift card and prominent demo at the 2012 New York Maker Faire and a feature in the November 2012 Popular Mechanics. These are all moves in excellent directions.
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Instead of Radio Shack being just renters in strip malls, they could be hacker spaces and rent the space out to people. Who wouldn’t go there for $15 a month to build?
It would also be a great place for electronic classes. I would love to learn new things.
If the current situation is any indication, methinks that finding workers with the necessary skills will be a challenge- especially at retail wages.
The danger, of course, is that techies who hack for the sheer joy of it (myself included) tend to undervalue their skills. That’s fine if you’re doing it on behalf of a cooperative community-based hacker space, but IMNSHO, a really foolish thing to do for slave wages on behalf of an enormous publicly-traded based corporation.
Maybe it is just because I have been around for a while but Radio Shack was the place where you went to buy expensive low-quality parts when you couldn’t wait for a mail order distributor to ship stuff to you. Most of their other equipment, I would purchase elsewhere. And their sales staff were not at all knowledgeable about the things they were selling. One last comment: I REALLY disliked their checkout process. Having to give my name and address every single time was obnoxious.
Back when I was a young hacker in the 1980s, Radio Shack was the place to go for your gear. The quality was decent most of the time, and it was a readily available source. More importantly, being able to walk around the store and look at different things gave you all sorts of ideas. Radio Shack went away from all that in the 1990s, and they never fully recovered.
In these interesting times, DIY and resiliency are coming into vogue again. Radio Shack had always been the go-to place for the DIY-crowd back in the day. They should forget the cell phones and consumer electronics, and start embracing the hacker community. Such a move would be good not only for their bottom line, but also for the country in general.
Imagine a land where the local Radio Shacks always have all the parts you need. Where the store clerks are knowledgeable and they have ‘presentation days’.
I used to love Radio Shack as a kid. Got all my batteries there for free 🙂
Here in Canada, we haven’t had a Radio Shack for 20 years. The Circuit City replacement is just plain crap, and it’s incredibly difficult to search out all the mom-and-pop electronics stores or surplus stores to find anything useful.
Combine that with high shipping rates and taxes, and it’s no wonder why the maker/hacker revolution of the US hasn’t grown nearly as fast up here.
Imagine a world… where stockholders have an attention span longer than 1 fiscal quarter.
I worked at the Shack way back in the day (1993-1996). Why? Because of my love for electronics and I had been shopping there since 1983. Then the shocker cam when I started working there..
Cell phones, cell phones, cell phones. Names and addresses. Names and addresses. Numbers, numbers, numbers.
That’s all the upper management cared about. I was a ‘horrible’ salesman because I didn’t trick everyone who walked through the door into buying a cell phone that they didn’t want. All I did was answer tech questions, and my numbers (and paycheck) showed it.
Upper management wanted me fired a few times because of low numbers (and not selling cell phones), but my store manager wouldn’t do it because I answered all the tech questions, and actually understood technically what other sales staff didn’t. I knew back then that it was not a good to focus on cell phones and retail, and I’m quite surprised they are still trying to go down the same road after all these years.
I wish they wouldn’t have sold out back then, but more than that, I wish they would follow the advice in the above article now.
Not everything in the world is worth saving.
I worked there for 10 years (91-01). I knew my stuff and could sell. What I refused to do is shove things down peoples throats because that is how you lose customers.
When the company started making services like cell phones and later dish systems the path they went down in order to get a piece of the monthly bill the subscibers paid, that was the beginning of the end.
The parts and accessories have a large margin and accounted for a good chunk of sales as well. The problem is the company kept raising the prices to boost the bottom line and at the same time cutting back on the selection and sticking them into annoying little drawers instead of properly merchandising them.
The other issue is that the executives(at least the top ones) didn’t work their way up from the bottom and had no sense of the customer base. They were outside hires.
Radio Shack will ultimately go out of business. Small independent retailers are a better answer to the hobbyist/maker market.
They abandoned the maker, diyer, and even hams …. Now they try to sell a few over priced arduinos … Yet few of the supporting components … And try to claim they’re Maker Friendly ….
Good Riddens to bad rubbish ….
Best I’ve been able to say about the Rat Shack for the last twenty years is that they are open at 9:40 PM when you desperately need just one part. But the quality was always horrible, and the selection just got thinner and thinner.
They are trying to reverse this a little. My local stores have added a few new displays of re-branded Maker Store stuff (at a big mark-up), and there are oddly random new things in the old, tiny, disorganized parts bins.
Their online store is practically un-searchable, their bins and packages grossly uniformative (boy, do I miss the old IC packaging with the pinout and electrical specs on the back!) and their selection is thin and hit-and-miss.
But there’s no way to make it as a pure parts store these days, so I really doubt there will ever be substantial improvement there.
I’ve been waiting for them to go out of business for nearly 20 years. They provide nothing useful, everything is overpriced or is total junk.
I’ve never understood how they have stayed in business so long.
I’m of mixed emotions about this. I want Radio Shack to remain a resource of last refuge but they’re just too clueless for even that. For example, rectifiers are typically used in groups of 4 for a full bridge, but Radio Shack sells them in packs of 3. If you need 4 of part “A” for every one of part “B”, Radio Shack dropped part “B” due to poor sales.
Tandy, the parent company, really dropped the ball with the immense failure of “The Incredible Universe”: an appliance mega-store that tried to complete with Circuit City and Best Buy. The Elizabeth NJ mega-building is still vacant.
Tandy leather was a fun store too. I think they’re all gone. Bring back Tandy Leather & crafts as a corner of the Radio Shack for crafters & makers of all skills!
Went to RS for the first time in 10 years to purchase a battery. They had their no-name repackaged battery for $7, CVS next door had Duracells for $6. Kinda reinforces my belief that they’ve turned into a cell phone store with nothing to attract me anymore. Sad – I used to live in RS when i was a kid.
Honestly, it depresses me about radioshack. I’ve only been playing with electronics for a few months now, but still. I go into RS because you know, I want a little PC board to put a project on and don’t want to wait for an online retailler. And first thing that comes in the door (even though the employees know me) "hey you wanna buy" and I have to just cut them off because I don’t want to hear the rest.
Its sad that thats all they try for, when in reality I do see a couple people from time to time walk in there, usually some teenager working on some little project for school or something. SO i go and harass them and tell them about the projects I’ve built, and usually by the point I talk about airsoft stuff, they’re already making way for the endcap with the arduinos at it and coming back asking what else they’d need for some idea they just had.
I wonder. If I made a bet with a manager at an RS. Just setup a little table with a couple friends and a bunch of our assorted projects sitting there. And a supply of parts, LCD screens, buttons, pots and other things(basically the things that RS doesn’t sell but should) Definately an obligatory RPi too. I’ll bet I could make more money in an afternoon then the RS could with its phone sales.