Its been a long time coming but RadioShack, which opened its doors in 1921, has now filed for Chapter 11 bankruptcy in the US and it will be selling off more than half of its stores to cover debts. Standard General is set to purchase up to 2,400 stores, with the remaining 1,750 stores being acquired by Sprint, to be used by them to set up a retail presence. These stores will stay open for now, but this will be very hard to come back from for the company.
Gershon Distenfeld a Director of Alliance Bernstein said that “RadioShack died years ago; we’re only now holding the funeral. Good active managers have avoided RadioShack for a long time.” The rest of the stock market seemed to agree with him, the NYSE delisted RadioShack on the 2nd of February after giving it warnings in January and in July of 2014.
RadioShack has also had several international stores in Canada, Australia, France, Belgium and China as well as some franchise stores in Malaysia. Most of these international stores are either franchises or are run by another company, InterTAN, with many having disappeared in the last few years.
Many seem to be blaming the management for not adapting to the market, but on the other hand it was where many Americans went to buy their first computer, when computers were still relatively new on the market. Since then it has become a place for electronics repair and a good place to get spare parts but it failed to remake its analog business in the digital age and it never quite became a destination store for big electronics purchases.
A 2014 Super Bowl advert for RadioShack said “The ’80s called, they want their store back”, “It’s time for a new RadioShack”. Management obviously knew that it needed to try to reinvent what RadioShack was, but it seems it didn’t do so fast enough.
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KitGuru Says: It’s always sad to see a business that has been around so long be wiped out by failing to adapt to the market. In this case though keep in mind the 27,500 employees who will be looking for jobs now. When was the last time you were in a RadioShack.