RadioShack to close up to 550 stores
GordonMcComb
Posts: 3,366
This past year we were all delighted to see RadioShack increasing their stocks of merchandise of interest to electronics hobbyists, including a bundle of Parallax product. While I felt then, and still feel, this was a move in the positive direction for them, it might be a case of too-little, too-late. RadioShack posted a stock performance drop of some 68%, and announced a co-op marketing deal (mobile phone related) with Target has fallen through. They recently announced they'll close between 450 and 550 stores this year, this on top of about 120 stores closed over the last few years.
Specialty stores are having a hard time of it, so it's not just RadioShack. I read this morning that Barnes & Noble will close many underperforming stores. My local Office Depot closed last fall, and both they and Office Max will close another 250 to 300 combined.
-- Gordon
Specialty stores are having a hard time of it, so it's not just RadioShack. I read this morning that Barnes & Noble will close many underperforming stores. My local Office Depot closed last fall, and both they and Office Max will close another 250 to 300 combined.
-- Gordon
Comments
</sarcasm>
Case in point: This last week I needed to get some white chipboard, the kind for use in backing photos in frames and such. I don't want or need expensive "archival quality" mat board, yet that's the only thing places like Michaels is offering these days. Whatever economy chipboard they sell now is pre-cut stuff for scrapbooking, and is too small for my needs.
This was product a number of local stores used to sell, so I could buy it locally when I needed it. This time I ended up having to order from Walmart of all places, mostly because they offered cheap shipping. Yet I'm still paying more for less.
It's getting harder and harder to find things locally, so I'm just turning to mail/internet ordering for most things. The problem these bricks-and-mortar retailers don't realize is that this is a slippery slope. Once customers get used to ordering away for things, they don't go to the local stores. I think this is what RadioShack, Office Depot, Best Buy, and the others have done to themselves. By cutting back their in-store stock, turning their customers increasingly to their Web portals, they're slowly putting themselves out of business. Once on the Web people know how to comparison shop.
I understand it costs money to stock stores. But they shouldn't cry when they have to close a store because they've let the place go to seed.
-- Gordon
If someone told me three years ago that I'd be running an online store that would be directly competing with Radio Shack, I would have told you you were crazy, yet...
Those kits that Radio Shack carry are at such a high price that only the desperate or the uninitiated make that purchase.
The Internet has changed our lives. When was the last time you searched for phone book to find a phone number?
Jeff
The whole concept of retail brick and mortar stores for most products is just more expensive, counter intuitive, and a hindrance to real diversity and innovation. Direct sales via online stores (or other mechanisms) allows for a greater profit to the creator, more diversity in products available (since they don't have to convince some retail buyer to include them), and it's generally cheaper.
The world is changing, the train is leaving, hop on board or get left behind...
Personally I've been getting more and more online. I do go to local stores for things that I need or want right away. Problem isn't cost (microcenter for example carries computer components for less than available online) but rather selection. Far to often what I want at the time isn't carried by local stores and more and more stores won't special order anything anymore. That means if you want that part you have to get it online!
And they really turned me off when they started asking for your address for every purchase.
Bean
If the Chinese can standardize clothing and shoe fits and sizes, then you won't even have to try on clothes in the store - you'll always get what you order. Money back guaranteed.
In short, what's to stop internet sales from tying directly to Chinese manufacturers? Cut out the middlemen and we all save money. Right? Yee-ha!
Jeff
Maybe unmanned autonomous delivery systems? It's not too farfetched, methinks.
I also read an article recently that malls are going to be the next area of the economy to be right sized. There's too much retail space versus demand and something is going to give.
Hello!
Strange.... I went into one today in Manhattan. It was to find an adapter which would translate a 1/8th inch stereo connector into a 3/32th inch one. (Never mind I would be plugging it into my TI83Plus calculator.) I catch an "associate" and she starts helping find the thing. First we find one that goes in the reverse direction, the key there was the price, from that I get her to void it. Then we go back and as that's happening I tell her the price was the key, its right next to what was first found.
We spend the time talking about a purpose behind such things, never mind that won't be mine, then when it comes to the procedures of ring it up, the usual business of wanting my address did not happen. Wanting to see my card when I tell the POS terminal that I'm doing it as credit, yes, but address no.
My disappointment for expecting something to be at the store, or other people's perceptions of what can be purchased there in relation to my involvement, could fill a book, so I won't talk about that.
I laugh about the online shipping thing.
That will hit a wall soon.
Like when the automated picking machinery breaks down, or shipping distribution center goes down, and it's a simple fix (if only I could fix this burnt resistor, or solder in this capacitor, or solder a jumper wire in, or replace this glass pill fuse...) but there's nowhere around to get such a thing... You'll hear me laughing.
I love the internet, but there's too much reliance on it. For all we know, there probably is a kill-switch for it despite denials.
Sorry if I'm a bit negative, but I can see the writing on the wall.
If you understood how the internet worked, then you'd know that a "kill switch" is laughable. Best they could do is get coordinated compliance from several backbone owning companies to turn off their pipes, and even that would just slow things to a crawl, and not completely stop it. However, getting that compliance is another matter, since much of America's economy rides on those backbones. The stock market would implode, every major company would be put into chaotic disarray. And since the government is pretty much run by those same companies (or agent representing them), I wouldn't expect it to ever happen.
https://en.wikipedia.org/wiki/Guns_versus_butter_model
Either a country spends its money on lowered taxes for an increased economy, or it spends its money on military which is a complete waste.
At least with lowered taxes, people re-invest their extra money into things they want/need. But if the government keeps doing what its doing (and it will)
The butter of life, (stores, products, foods, etc) all get reduced to bare necessities because its the only thing people are buying in mass from not having any spare cash due to over-taxation.
This causes store closures, factory closures, job loss.. unemployment, welfare, homelessness.etc..
The us is spending all time highs on defense right now, while 15% of the population is on S.N.A.P. food stamps right now, unemployment is some where around 20%
Because so many are on low incomes, the only way the govt can recoup that missing tax base is convert to sales taxing, increased wage tax.
A police state is a natural progression to a country that has chosen guns over butter, and we see this. Police will now steal your money if you have more than a few hundered dollars on you if they search you and find it, they don't even charge you with anything because they know that the city paid lawers will fight you .. you will usually end up paying more money to get your own money back.. The city employees like it, they all get job security, and no one gets a slap on the wrist for PERSONALLY fined for stealing a law abiding citizens money.
During 2011, the U.S. spent more on its military budget than the next 13 countries combined.
Guns and Butter, .......the US people, officials, and government system of laws and rules have chosen guns.
I'd rather die from eating too much butter, fat, warm and happy.
But it looks like everyone is going to die starving(crappy food lacks nutrients), diseased, cold, and violent, with nothing much to show for it all except scorched earth, and bodies hitting the floor. AmeriKa, F*CK YEA!
Loop,
maybe you've just saved Radio Shack from oblivion. Think about it: all they'd have to do is restyle themselves into a survivalist store. They could springboard off their home security systems and branch into things like DIY drone defenses, DIY bunker excavation kits, perimeter defense systems, pepper spray, trip wire and guerilla manuals. They could sell 55 gallon drums of dried food, hawk gas masks and bullet proof vests, dole out guns to anyone with a pulse, ammo to anybody with the cash or gold bars. Bulldozer-conversion DIY tank kits. Give judo classes. Man, it's the wave of the future. That, of course, and financial services, which presently makes up about a third of the US economy. Radio Shack could soon be your one-stop shopping experience for gathering assault rifles and portfolio advice. This Radio Shack owner in Montana was just a couple years ahead of his time...
My own experience started in about 1959-60 with ordering parts from Allied Radio and Radio Shack for DIY ham radio. Allied Radio was the leading catalog parts house in the US and Radio Shack was an alternative. This was before Tandy Leather purchased Radio Shack and converted their leather hobby craft stores to electronics hobby stores.
So I guess I've seen a big portion of the journey.
Just a couple of observations.
a. It takes years for a major corporation to go out of business. Just take a look at how long it to took for Kodak to go bankrupt. Or look at the history of Polaroid for another case study (Long before it was over, the president and founder resigned as he said there was nothing more to invent and develop).
b. Radio Shack has been cropping up in Taiwan news as it is making its way into the Chinese market as a brand of big screen TVs. It may be that the stores in the US is disappear, but the brand might live on in products for the consumer in China.
The whole tax structure of corporations is designed to either avoid bankruptcy or have a very orderly one, so Radio Shack may just be taken over by an Asian corporation that sees its worth in the brand name.
http://www.RadioShackCatalogs.com/
http://images.search.yahoo.com/search/images?_adv_prop=image&fr=yfp-t-701-s&va=vintage+heathkit+catalog
The company owned store wasn't the first to get the Parallax goods, but they had more goodies than the other stores, which seemed to take months to sort through the inventory. I finally saw a Quickstart board in an RS in Phelan, CA of all places, and bought it.
The death of any company owned stores means less diversity and increased difficulty for us enthusiasts trying to get Parallax products in person.
Unfortunately, this "maker" renovation that RS undertook seemed to be lackluster and only skin deep, they didn't appear to actually put any follow-through plan into place that would ensure return customers -- and repeat orders to Parallax.
It seems that the Maker Shed brand has faired the best, given the increased line of products and proliferation of that brand and Arduino products.
In another 25 years, old catalogs will have physically disappeared as everything might be for sale on ebay and Amazon.
Nostalgia will just to be more virtual with less material support.
The problem with having 4000 independent stores is that they look at the overhead and their cash flow and decide to cherry pick which items to stock. The end result is a lot of stores that don't have what you hoped they would.
If McD's allowed some outlets to not carry McNuggets and others to skip Zero cola, would it be anywhere near as successful?
Of course, Ace Hardware store is a franchise that pretty much seems to allow the owners to decide what to stock, but the demand for their products are a bit more universal.
Are the independent stores permitted to carry lines of product outside of Radio Shack's brand? Not all franchises are the same. And some just really have a sweet business model that works well.
I suspect Parallax will fare better than RadioShack as everybody knows that they can shop the web and buy product direct. I just will the shipping beyond the USA was not a huge transaction tax.
Parallax might do well if it had an EU based distribution center and a China based distribution center. So that buyers in these regions can at least find a secure local shipping channel at lower costs.
You have it backwards. From RS's own Franchise FAQ page (very top): "At present, roughly 20% of U.S. domestic RadioShack stores are dealer/franchise owned and operated. The remaining stores are owned and operated by RadioShack Corporation."
Since the 1970s RS has always owned the majority of its stores. Your particular area may be unique in that the majority (2/3rds) of the stores around you are franchises. RS can't "close" any franchise store, as those are independently owned and operated, so all of the (up to) 550 of the planned closures are going to be corporate owned. However, the crux of the problem is RS's loss of brand value, and that does extend to the franchise stores as well, who may consider some change on their own.
Hobby King is a perfect example of what you're talking about.
Jim...
Ken Gracey
For me, I think RadioShack has to decide what kind of retailer they want to be. They can still "own" a tremendous segment of the hobby market by turning that segment into a mail order superstore. They need to close the majority of their retail outlets, increase the size and stock levels of the remaining locations they keep (talking going from 1500 sq/feet to 5000+ sq/feet), and concentrate on 1-day shipping with 3-5 well-placed distribution points around the country.
Or they can still try to slug through things in the mobile space, though I fear Walmart and other Big Boxers will just end up taking their lunch. Or they could try to be the do-everything home electronics outlet with too many small strip-mall stores. Look where that's got them.
Either way, if they don't make big changes now, I think we'll see them follow the Tale of the Twinkie, though with much less sentiment toward their going out of business.
-- Gordon
Of course. Maybe they need to turn their stores into STEM learning centers, or Tech Shops.