Moribund RadioShack prepares to pull plug; NYSE suspends trading

“RadioShack Corp. is preparing to shut down the almost-century-old retail chain in a bankruptcy deal that would sell about half its store leases to Sprint Corp. and close the rest, according to people with knowledge of the discussions,” Lauren Coleman-Lochner, Jodi Xu Klein, and Scott Moritz report for Bloomberg. “The locations sold to Sprint would operate under the wireless carrier’s name, meaning RadioShack would cease to exist as a stand-alone retailer, said the people, who asked not to be identified because the talks aren’t public.”

“The discussions represent the endgame for a chain that traces its roots to 1921, when it began as a mail-order retailer for amateur ham-radio operators and maritime communications officers,” Coleman-Lochner, Klein, and Moritz report. “It expanded into a wider range of electronics over the decades, and by the 1980s was seen as a destination for personal computers, gadgets and components that were hard to find elsewhere. In more recent years, though, competition from Wal-Mart Stores Inc. and an army of e-commerce sellers hurt customer traffic.”

“In a sign of RadioShack’s escalating woes, the New York Stock Exchange said Monday it would suspend trading of the stock immediately. The exchange took the step after RadioShack failed to submit a business plan that would address its lack of compliance with NYSE rules. Companies listed on the exchange are required to have an average market value of at least $50 million for 30 straight days or shareholder equity of that amount,” Coleman-Lochner, Klein, and Moritz report. “RadioShack currently has more than 4,000 company-operated U.S. stores. Sprint is discussing the acquisition of 1,300 to 2,000 locations, the people said. In one possible scenario, RadioShack considered keeping the name alive as a store-within-a-store concept involving wireless carriers, two of the people said.”

Great story. Thanks for taking the time to share.

You're welcome. . . I am still angry about it. . . same thing happened to one of the best lumber/hardware chains around: Lumberjack stores.

They had maybe a dozen stores and I even went to talk to the owner Dave Levi when I moved to Stockton to plead with him to open one in Stockton because the lumber stores we had here really were bad. He said they had no plans for it but six months later they opened a Stockton store.

Lumberjack had a retail model where they had older retired journeyman specialists in every department who would talk to you to tell you exactly how to do something. Lumber had a journeyman carpenter, plumbing a plumber, electrical an experienced electrician, heating & air, tools, gardening, all the same. They covered all shifts. It really helped to have someone who made sure you KNEW what needed to be done.

LumberJack stores were making money hand over fist and expanding like crazy in the Central Valley and foothills of California with that business model.

An Ohio Company called Payless Cashways came in and made Dave Levi an offer he couldn't turn down for the chain. They said they liked the business model and he'd be the President of the NEW Lumberjack as they took it nation wide. HAH!

After he sold out, he was gone in about three months. Not his choice. They replaced him with one of their corporate VPs. They also laid off all of the Journeymen and replaced them with minimum wage new hires. Lumberjack had been a store where you could buy nails by the pound from a bin. . . now it was by the box. Screws, boxed. Or bubble packs replaced the stock Lumberjack used to carry.

I found out about it when I went in to buy some Trojan Saw blades for my jig saw. I found this 18 year old kid in the tool department re-arranging the hammers by how good they looked on the display, not by function. Oh, Oh, I thought. This can't be good.

"I need a six-and-a-half-inch, 12 tooth Trojan saw blade," I say to the kid, who immediately looks blank.

"Uh, Trojans, trojans?" he looks baffled. Keep in mind, this is the only clerk in the entire tool department. "Aren't those condoms?"

EEEYUP! I'm in trouble, but not as much as Lumberjack!

"No, it's a saw blade for a stationary jig saw." I figure he needs an education. Maybe the journeyman is at lunch.

"Oh! Saw blades," waving vaguely toward an aisle, ". . . over there!"

Walking "over there," I found a rotating kiosk of dozens saw blades in bubble cards all arranged very nicely by the way the looked, not by function, saw, or type. . . but all Chinese made junk. Oh, Oh, it's getting really bad!

I saw someone I recognized from the old Lumberjack and called him over and asked him for what I needed.

"Oh, all that stuff's gone. Payless Cashways sold it all to a wholesale hardware company. All of the new stuff is ordered out of Ohio. We can't order anything. We just get truckloads of standard stuff twice a week based on what was sold through the registers." He laughed. "We joke about how they're going to replace the stuff that walks out the door here in Stockton! Everything is based on their 'standard store' order from Ohio. It snows in Ohio. So we get SNOW SHOVELS and, You won't believe it, but all Lumberjack stores got 450 Snow Blowers last week! What in hell are we gonna do with 450 (expletive deleted) snow blowers in our Stockton and Sacramento stores?"

"Oh, WOW!" I said. "Do you get enough customers from up in the hills to sell that many?"

"No way! These Ohio buyers don't have a clue what we need here. Maybe the Auburn and Placerville stores can sell a dozen or so. But that's not my department, you should see the lumber we get," he said.

"What about it?"

"It's the cheapest they can buy, and comes in completely green! Junk! But we have to sell it at dried prices! It warps before you can load it on your truck! You have to go through a dozen 2 by 4a to find a straight one! It's really bad working here now. They've let almost everyone who knows anything go and are hiring only part time kids. You know of anybody who needs a good lumber guy?"

Six months later Lumberjack declared bankruptcy. Another Golden Goose cooked.

Tell me, why do people see a business that is making money hand over fist and growing rapidly because of the business model it has, and the way it is doing business, buy it, and then proceed to CHANGE everything about it???

I just cannot fathom that way of thinking!

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