A eulogy for RadioShack, the panicked and half-dead retail empire

[happyslug]

119. Radio Shack has been marginal since the death of Charles Tandy in 1978.

http://en.wikipedia.org/wiki/Tandy_Corporation

Charles Tandy had taken his father's leather business in a new direction, into home leathercraft business. This had boomed in the post WWII era and by 1962 was expanding into other home craft areas. As part of this expansion Tandy took over Radio Shack in 1962 and converted it from a mail order specialty electronic store aims at the HAM Radio market, to providing electronic parts in their craft stores for other electronic projects. Radio Shack became the place to go for rare hard to find electronic parts. It did sell radios, and other electronics but its main thrust was electronic devices. In that era it boomed, but Charles Tandy died in 1978, just as the CB boom was in full swing. His successors basically abandoned craft electronics and concentrated in BS radios. When CB radios died out, they expanded in computers, then came up with the great idea of NOT making their own in the US, but to import Computers from overseas. On a short term basis that increased profits, but its also made it clear, that any repairs would take months and there was NO advantage to buying a Radio Shack then from any other dealer (i.e, none of them could repair the computer, and what repairs could be done could be done by anyone just ordering the part AND Radio Shack did NOT carry the parts in their Stores).

Tandy's family had lost control of Radio Shack at the death of Charles Tandy in 1978, but was able to get control of Tandy Leather again in 2000. Tandy Leather and its Craft business is booming for their have stayed with the home craft movement. Radio Shack has abandoned anything to do with repair of electronics (Radio Shack retains some aspects of this but it is clearly a sideline, an ignored sideline kept for its high profit margins but ignored for it is low volume thus low total profit).

Thus Radio Shack has abandoned the market that made Radio Shack. Radio Shack did this in the search for greater short term profits. It needs to go back to being a place to go for hard to find electronic parts, but that means accepting low profits on a year to year basis, and that is something the present management has refused to do since 1978.

If I was the head of Radio Shack I would do the following:

1, Abandon all of the high rent stores they have in malls today. Go with stand alone stores and get out of the Cell Phone Business (I would still sell them, but considered them a side line, but concentrate on other things for the cell phone, including chargers, batteries, wires and electronic PARTS and Accessories that go with Cell Phones, even phones Radio Shack does not carry).

2. Abandon any concept of commission. Good idea when you were selling high end leather and other supplies, but lousy when it comes to service. You want to be the place people go when they have problems.

3. Get away from the youth centric (and cheap) sales people. Yes, a lot of youth do know more about the modern equipment then us older people, but they know nothing about anything older then five years old. PAY for experience help, This work force will take years to build up and need to be retrained every year. You would be selling actual service and everything else would be a sideline. Such service can only be obtained by training AND experience, thus NOT youth centric. Yes, I hate going into a store and their "Service" is some collage age kid who can read the same box I am reading. Service means dealing with someone who knows what they are doing (and knows what they are selling).

Do I see Radio Shack doing anything close to the above? NO, they like minimum wage teenage workers for they are cheap. Radio Shack's definition of "Service" is a live body as oppose to you reading the box label alone. Radio Shack do NOT want to become a place where people go to talk about electronics and where on goes to get items to do something that is NOT out of a box. Radio Shack today is a rejection of what made it boom in the 1960s and 1970s. It is no longer the place to go to find odd ball electronic devices. If something is not high volume, it is NOT in their stores (and given the rent in the Malls, keeping long term hard to find items not profitable, thus why I would close all the stores in high rent locations, make the shopper come to the store, not just enter as they are going some place else).

It would take at least a decade to repair the damage the present management has done, and given the net the above may be to little to late. Radio Shack should be the first place people think of when they want some odd piece of electronics, but it is NOT do to NOT stocking the odd ball parts AND not retaining long term employees (i.e. pay them a good wage so they stay for 20-30 years) and for those reasons it will fail. The above MAY have saved Radio Shack if implemented in the 1990s, but I suspect it would be to little to late if done today.

On the other hand Tandy Leather, now part of the "Tandy Leather Factory" is doing fine, not great but also not facing bankruptcy.

http://en.wikipedia.org/wiki/Tandy_Leather_Factory