Radioshack Celebrates One Year Anniversary Of Closing 500 Stores By Closing 500 More

Zero Hedge ^ | 02/04/2014 | Tyler Durden

[SeekAndFind]

If it seems like it was exactly a year ago that turmoiling retailer Radioshack shut down 500 stores due to lack of consumer interest in its wares (and or consumer disposable cash), it is because it was. So how does Radioshack demonstrate its morbid sense of humor on the one year anniversary of said announcement? Well, by closing another 500, or about 12% of the retailer's total 4500 outlets currently in existence.

The WSJ reports that the company which once was the butt of all LBO-rumor jokes (and still is, only this time in the context of an M&A-rumor with JCPenney and/or the Joseph A. Wearhouse joint venture), is "planning to close around 500 stores in the coming months as the electronics retailer continues working with advisers to restructure the company."

RSH's pre-bankruptcy operation problems are well-documented. And funded - "in October, RadioShack secured $835 million in loans to refinance about $625 million of debt. Those funds, from a group led by GE Capital, also freed up cash for RadioShack's overhaul." Of course, when said overhaul fails, the loans rolls into a DIP loan which funds the company's bankruptcy.

As was well-documented during the Super Bowl, the Fort Worth, Texas, retail chain has been working on transforming its image from an old-school electronics store into a destination for shoppers looking for entertainment gadgets, like headphones and smartphone cases. Sadly, it appears to not be working.

The retailer has struggled to reverse a string of losses deepened by a sales strategy focused around smartphones, which failed to improve revenue over the past two years.

 

RadioShack executives last year suggested the company would resist downsizing its store footprint as they focused most of their attention on reinventing the brand's image. Stores might close in one section of a neighborhood to set up shop in more highly trafficked locales, but the number of outlets would stay the same, they had previously said.

 

"I think we're a 4,000-plus network," RadioShack Chief Executive Joe Magnacca said in a November interview. "My job is to make sure that we've got the market covered."

That, or a '0-precisely network.' And while the Shack struggles to find just what market it is that it covers, if any, the population will enjoy how it spends several months of cash flow on amusing Super Bowl gimmick ads such as this one which is a fitting - and hilarious - epitaph of what happens to every retailer that stop adapting to its current environment.

 

CLICK ABOVE LINK FOR THE VIDEO

 

Finally, while the ultimate fate of Radioshack is quite clear to most, a far more important topic is what happens to all the commercial real estate secuiritizations and/or malls that currently have a RSH location which is about to shutter. Then again, this is the new normal, and things such a fundamentals and cash flows are merely an irrelevant footnote.

[Blue Ink]

“But when I thought of going through the hassle of declining go give my name and address to the salesperson, I decided to go to Best Buy instead.”

...Where the Best Buy salesman tried to upsell you, and then sell you a warranty, and then when you escaped to the register, the cashier tried to sell you a warranty.

[Revolting cat!]

Radio Shack was a great chain when they sold electronics parts. There was another chain that sold electronics kits, what was its name Zenith, or something?

[Covenantor]

You thinking of Heath kit? They sold some zenith items.

[Revolting cat!]

Yep, Heath stores, superior to Radio Shack when it came to kits. Thanks.

[a fool in paradise]

I've got a $1.09 store in my town that beats Radio Shack hands down. RCA cables, stereo whatsits, headphone adapters, headphone cord extenders, headphones, etc. each for $1.09. Actually you can get a whole kit of stereo whatsits for $1.09.

Each one of those items will run you $6.99-11.99 at Radio Shack and just come in Radio Shack's own packaging.

Computer screwdriver kits for $1.09 too (all of those odd star shaped heads in metric and English measures, tiny heads too, this stuff runs $20-30 a kit at Microcenter).

But I didn't have time to drive across town and spend $3-6 on gas to get a $1.09 whatsit.

[nascarnation]

I've got a Heathkit tach/dwell meter I built in the 60s.

Still use it to tune up my 67 Camaro.

[Revolting cat!]

Wow, that’s great. We have an old electronics store in town with all kinds of things, but it isn’t cheap, and who knows how long it’s going to survive. A family operation.

[a fool in paradise]

This isn’t even an electronics store, just a well stocked dollar store.

There are still 2 or 3 parts stores I know of. Bins of whatever (pre-sorted, maybe one department with used items, the rest new).

The markup on cables and the like is insane.

[Flying Circus]

We have a Radio Shack in our small town. I have been in there a few times looking for things I can’t get at the local Wallymart but I’ve yet to buy anything there yet. When they have had what I was looking for they were 2 to 3x what I was willing to pay. When I really needed it, I could get it off the net for much, much less.

Their problem is they have lost their reason for existing. Their niche came from supplying electronics hobbyists with things that couldn’t be found elsewhere. Time moved on and electronics became too specialized and miniaturized for the hobbyist component business and they no longer have any consumer brands they can differentiate from competition. They are in a death spiral, charging premium prices stuff you can get elsewhere.

[Bobalu]

SM is not hard, it’s just intimidating for a newbie.

You can just drag solder many parts.

And a cheap 150$ hot air rework station will let you handle maybe 90% of SM chores.

A good microscope or even better yet a USB scope will help greatly.

You need a BGA workstation to do anything with modern SoCs ...nothing else will suffice.

I have been known to use an electric skillet to reflow a board,in a pinch. I used a 16 dollar hot air gun from Harbor Freight to do SM once... just to see if it could be done.. It worked,sorta, blew the small SM parts off the board at first though. Some Kapton tape made it work but it was a mess. :-)

[Covenantor]

There are still a few Heathkit and Eico items in a closet. I remember a Heath oscilloscope. And a 5 tube 30 (?)watt Eico amplifier built from a kit. Real beast, must weigh 20 pounds or so. Wouldn’t think so looking at it. Then again, maybe I should open it up, might have stashed so gold coins there.

[MayflowerMadam]

I think it was Radio Shack that sold those goofy Tandy computers that you hooked up to a cassette recorder. (IIRC, that was how it worked.) Early ‘80s maybe?

[ken5050]

True..too true..I remember some 35 years ago when I finished building my Heathkit tuner, pre-amp, and amp..I bought them at the local hobby shop..and the best advice I ever got from the owner was before I started to build the first, to spend several hours practicing my soldering..

[clearcarbon]

"I miss the old Olson Electronics store."

...as well as Lafayette Radio Electronics.

[SamAdams76]

Radio Shack has had a sad fall from grace.

Back in the 1970s and early 1980s, Radio Shack was one of the greatest places to go. The stores back then were exploding with gear from CB radios to shortwave sets to do-it-yourself Heath kits. The shelves were teeming with radios (yes, Radio Shack used to sell radios). When personal computers started making the scene, Radio Shack was on the cutting edge. I think for a few years, they sold more personal computers, including their own brand (TRS-80), than anybody else.

About the mid 1980s, they started going downhill. Especially when they used to make you fill out a complicated form every time you bought something (even if it was just a battery) so they could put you on their mailing list. Even if you said you were already on the list, they wanted the form filled out anyway. I think the employees were rated on the percentage of forms they got the customers to fill out. It was all very obnoxious.

Nowadays they are a sad shell of what they used to be. Mostly staffed with pimple-faced teenagers who know very little about electronics but they push you very hard to get a cellphone with a two-year plan. Apparently they are comped heavily on how many cellphone contracts they sell and that is the only way they can make extra money.

[Larry381]

The last time I entered a RS was last year to buy an HDMI cable. The only one he said they had cost $65 and when I told the clerk he was insane and I could buy one online for under $10 he practically called me a liar.
I walked out and bought two of them online at NewEgg for $9.95.

If I had wanted a cheap one I could have paid 5.95 for a Chinese import.

[Cyber Liberty]

Wait, what are you sayin’?

[freeandfreezing]

Mostly staffed with pimple-faced teenagers who know very little about electronics...

That's nothing new. Years ago I had to endure a Radio Shack sales guy arguing with me that their $21 plastic horn speaker was as good as a JBL pro mid range horn that sold for something like $340 at the time, and could take over 100 watts input. I wanted to go out to the truck and bring in a Crown amp to give him a little demo, but I figured he'd want me to pay for the smoking speaker when I was done.

[the OlLine Rebel]

Of course, a tape is a “cassette”!

There are many advantages to it. They’re still selling the tapes, too. Man did we have fun recording ourselves over and over for posterity.