I also have had an incident such as yours and vowed to find another place to do business.
Obviously it has a had a cumulative effect.
Posted on 02/17/2006 12:06:55 PM PST by iPod Shuffle
RadioShack to close up to 700 stores
Fri Feb 17, 2006 1:16 PM ET
By Nicole Maestri
NEW YORK (Reuters) - RadioShack Corp. (RSH.N: Quote, Profile, Research), whose chief executive has admitted to lying on his resume, on Friday said quarterly profit fell 62 percent after a switch in wireless providers led to an inventory write-down, sending its shares to a nearly three-year low.
The consumer electronics retailer, which said it was hiring legal counsel to investigate the admission by CEO David Edmondson, also announced a new turnaround plan that includes closing 400 to 700 company-operated stores and liquidating slow-moving inventory.
The company said it was "unwise" to issue earnings forecasts for 2006 given the uncertainty of the turnaround plan, which could cost up to $100 million.
"We have been very cautious on (RadioShack's) ability to execute the wireless transition smoothly and are skeptical on the just-announced turnaround," Lehman Bros. analyst Alan Rifkin said in a note. "We would not be owners of (the) shares at this time."
RadioShack shares were down $1.61, or 7.8 percent, at $19.14 in afternoon New York Stock Exchange trading after touching as low as $19.02.
FALLING EARNINGS
Fourth-quarter earnings fell to $49.5 million, or 36 cents per share, from $130.9 million, or 81 cents per share, a year earlier.
According to Reuters Estimates, excluding 22 cents per share for the inventory write-down and a 2-cent charge for an accounting change, profit would have been 60 cents, which compares with the analysts' average forecast of 66 cents.
Sales rose 5 percent to $1.67 billion, compared with analysts' target of $1.62 billion.
The results come two days after Edmondson admitted that he lied about his academic record on his resume and on the company's Web site. The discrepancy was first reported earlier this week by the Fort Worth Star-Telegram.
At an investor conference, Edmondson began by apologizing for any embarrassment the situation caused and said the issue was now in the hands of the board.
As for the quarterly results, Edmondson said sales were "good" in low-margin nonwireless categories like MP3 players, but were weak in high-margin categories, like batteries. Sales of wireless products, a key profit driver, were below targets.
Last year, RadioShack said it would switch phone carrier partners to try to revive its wireless sales. It agreed to sell Cingular Wireless phones and cut ties with long-time ally Verizon Wireless. It also signed a new 11-year deal with Sprint Nextel Corp. (S.N: Quote, Profile, Research).
But the transition, which took place at the end of the year, turned out to be more difficult than expected.
On Friday, RadioShack said it took an inventory write-down of $62 million in the quarter, and it is replacing old, slower-moving merchandise like speaker wire and outdoor antennas with new, faster-moving items
"Our business model for many years has been based on high- margin, slow-moving products," Edmondson said during an investor presentation. "These products are taking up valuable space in the store that can be much more efficiently utilized."
RadioShack said it would liquidate some products, take "aggressive" mark-downs on others and let some stay on store shelves until they sell out. It will continue to sell some of the products on its Web site, though not in the stores.
The company also expects to add about 200 kiosks in 2006, relocate some stores to better sites, and close two distribution centers.
RadioShack, which has 7,000 company-owned and dealer stores, estimated it would incur costs of $55 million to $100 million on the inventory write-downs and store closures in 2006, although it may take some of the costs in 2007, depending on when it closes the stores.
"While the execution of the turnaround plan will trigger the recognition of significant costs," Edmondson said, "we are confident that the steps we are taking will put RadioShack back on the track to sustained profitable growth."
Dumb stores with no theme. What exactly would you be looking for in a Radio Shack that you can't find in more variety and less cost at a Circuit City or a Best Buy?
I understand they will still honor the warranty (don't expect any to be in stock at your local store, though). The problem is you will probably end up with some Chinese tube which will eventually show off its heritage by emulating a firecracker. EL84's aren't all that expensive yet, but they're a lot cheaper and easier to find than a Fisher output transformer.
Amen. Corporate management is CONVINCED that they can draw and keep customers by having retail help hound the living daylights out of you to buy a cell phone, sign up for a drawing, enroll in an ISP, whatever. The poor staff know it's an intrusion and 99.9% of the people say NO (and don't return after being pressured) so what's the point? Marketing types have to understand that a captive audience is not always an opportunity to flog snake oil (ask the cinema owners!). There are too many alternatives (online, etc.) and the word-of-mouth that accompanies these schemes takes away more business than it generates.
Yes - I think it reached critical mass after many years. Now they have placards by the registers from the smilin' prez of Radio Shack telling us that they won't ask for our name/info anymore! Gee thanks! Too bad you turned so many customers off doing it for 20-30 years!
heh
everytime they asked me for that stuff, I just made things up, especially if I was paying with cash :)
Ah, gotta love the stock market - the one place where making a profit is still bad news.. other than among liberals..
Now that you are talking about this issue, I must agree. This is when Radio Shack lost it's marketing share and drove their customers away.
Twenty years ago, I refused to provide my address. If they would not take my money without the information, I would walk out of the store.
It was insulting and I refused to comply.
I worked there for six months two years ago, and it was exactly as you described it. Honestly, I'm surprised that Radio Shack is still in business at this point.
I also have had an incident such as yours and vowed to find another place to do business.
Obviously it has a had a cumulative effect.
When the folks at RS ask for my name and address I love giving them something from from movies or TV. I once told the goofy kid behind the counter that I was "Caspar Gutmann" (from "The Maltese Falcon") and that I lived at "1313 Blue View Terrace" (from "The Life of Riley" I believe).
I hope you didn't use Circuit City Credit Card to pay for it. I've been both a loyal Radio Shack and Circuit City customer. In the past couple of days me and Circuit City parted ways.
A WARNING ABOUT CIRCUIT CITY/CHASE CREDIT CARD SERVICE. From their web site FAQ's under title Using Your Circuit City Credit Card.
58 Why am I being assessed a fee for making an online payment? An Expedited Payment Fee of $14.95 will be charged when an online payment is made within the time period starting at midnight 3 days prior to the due date and ending on the statement date at midnight.
No advance notice of this policy change was sent out. They mean 3 business days BTW. They popped me for it this month. They made a quick $15 but Circuit City just lost a long time customer. I can pay Radio Shack and be credited within 24 hours even on weekends. I can pay Direct TV on line and be credited within an hour. Chase Bank takes at least three whole days to process an online payment. I've done business with Circuit City so long my first purchase was a freezer the second a microwave oven. The third was a washing machine I think.
Don't bother calling Circuit City Customer Service they don't want to hear about it. The billing will still show up on the electronic check as FNANB but Chase owns it. Circuit City's name is on the card but they care very little about their reputation now.
Radio Shack s a good place for serious do it yourselfers to buy parts and is also a good place for things like Shortwave, Ham, and scanner radio's. Thus they do live up to their name. To do better for many things they sell you would have to use on line ordering from places like Grove Enterprises. I have 5 police scanner from Radio Shack no problems. My cordless phone as well. No problems. GMRS radios the same. Computer power back up works fine also. I have had Radio Shack clerks go out of their way to find items for me saving me miles of driving. Yea I wish they still carried what they did 10 years ago but then again does Circuit City carry what they once did?
On most items especially CD/RW etc Wally World can beat their prices. Their rebate program is unnecessary as well. They are only using your money a bit longer on items they could have sold cheaper to start with. Go to places like Rip Off reports and you'll find many customers dissatisfied with Circuit City these days. One was an Iraq War Vet.
My first scanner there was a Pro-2034 then a Pro-2040, Pro-2045, Pro-76, and my newest the Pro-95 no problems from any of them whatsoever. It's the only place near me I can go get connectors to make up my own BNC cables. They also have a great Discone scanner antenna with a low band on it. I connected it to a TV signal amp 20db then use a TV Signal splitter to run 2-3 scanners off of it. If you don't do that they will bleed back on each other due to internal RF generation.
My other antenna is an inverted fringe outdoor tv antenna mounted with elements up and down rather than flat. Same set up works fine :>}
Btw, I just bought a Radio Shack DSP noise reduction system at an estate sale, to use with SSB shortwave reception. Not meant to compete with the high-end dedicated HAM DSPs, but seems to work pretty well and I am happy with it.
I just started using my old Pro-34 again after a long respite. Although they have gone to trunking here, there really isn't much traffic and I don't seem to miss much just scanning those frequencies.
Yea Grove likely has it. Link coming in private reply soon.
The whole "You've got questions, We've got cell phones" thing isn't working so well, eh?
There are about 100 billion cell phone stores out there.
Trunking isn't what is was all cracked up to be. NYC learned a hard lesson on that on 9/11. I read up on their communications issues just out of curiosity. They scrapped trunking all together after 9/11.
Each precinct now has assigned channels with a basic repeater system the same with fire and paramedics from what I read on it. They gave Mass Transit all the 800 trunking headaches.
I live in rural East Tennessee so there's plenty to hear on non trunked systems. I use the system I was talking about to reach up into Ohio in the 150 MHZ range.
Like somebody else posted though I wish they would go back and serve radio hobby interest more. They are down to I think 2 scanners now maybe three. OH BTW Police Call Book is no more. Gene Hughes the editor retired :>{
Now where will I get my free battery? This sucks.
That is funny, and with the classic RS C.
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