Oh nos! Not Another Radio Shack Thread!! (good news this time)
GordonMcComb
Posts: 3,366
Didn't see the news about Radio Shack's "credit lifeline" posted here previously, so I thought I'd mention it, as it's good(er) news this time around.
In a nutshell, Radio Shack was able to secure about a half-billion dollars in replacement credit, which extends out its ability to continue business. The former credit terms with GE Capital were apparently onerous and quite limited, and news on the street was that terms of this credit prevented RS from closing the number of stores it felt was necessary to mount a come-back.
Here's a story related to Fitch's rating of RS stock, which describes (somewhat negatively, because there's still a lot of risk) some of the technical underpinnings:
http://www.reuters.com/article/2014/10/06/fitch-radioshacks-new-financing-plan-a-s-idUSFit78192020141006
Now, I'm not sure if all this dough will end up making a whit of difference (sorry, Whit, didn't mean to drag you into this!). But the main thing is that RS may be able to start closing the stores it needs to. If it can't do that, there is no possible way it can survive. Personally, I think they need to close all but 1200-1500 stores (roughly 2/3), but we'll see. Fitch seems to think it's only a temporary reprieve, but RS could pull a surprise this coming holiday season.
If so, we may have to drive a little farther to buy some resistors, but at least they still will be available.
In a nutshell, Radio Shack was able to secure about a half-billion dollars in replacement credit, which extends out its ability to continue business. The former credit terms with GE Capital were apparently onerous and quite limited, and news on the street was that terms of this credit prevented RS from closing the number of stores it felt was necessary to mount a come-back.
Here's a story related to Fitch's rating of RS stock, which describes (somewhat negatively, because there's still a lot of risk) some of the technical underpinnings:
http://www.reuters.com/article/2014/10/06/fitch-radioshacks-new-financing-plan-a-s-idUSFit78192020141006
Now, I'm not sure if all this dough will end up making a whit of difference (sorry, Whit, didn't mean to drag you into this!). But the main thing is that RS may be able to start closing the stores it needs to. If it can't do that, there is no possible way it can survive. Personally, I think they need to close all but 1200-1500 stores (roughly 2/3), but we'll see. Fitch seems to think it's only a temporary reprieve, but RS could pull a surprise this coming holiday season.
If so, we may have to drive a little farther to buy some resistors, but at least they still will be available.
Comments
With a population of 5 million and say 10 such stores (Which might be a stretch) I might extrapolate that to the USA.
There you have 300 million population so 600 Radio Shack stores would be about right.
Now, how many does RS currently have?
Resistors I can wait for: http://www.ebay.com/itm/Each-Value-Metal-Film-400-Pcs-1-4W-1-20-Kinds-Resistor-Assortment-Kit-Set-JM-/351001342280?pt=LH_DefaultDomain_2&hash=item51b94f7148
It's those overpriced, long-contract cell phones I can't live without!
That's an interesting turn of events for the Shack. They haven't found the right formula yet, but I'm pulling for them. I love the smoking clearance deals as much as the next guy, but they are just bleeding the stores of money. I'd be surprised if their success was a simple matter of closing stores. Retail stores need to become more relevant as the world (mea culpa) has gone mad for click & order. Maybe offer workshops, classes, birthday parties, contests, services, repairs who knows? All that is very difficult to coordinate. No easy solution.
I personally think that RS jumped the shark during the mid-80s when it abandoned the hobbiest / DIY market and shifted it's priority to electronicee (word?) toys like cheap RC cars and other junk. From their they ended up selling a bunch of other consumer electronic junk and moved further and further away from the hobbiest / DIY market. These days I don't really even know what they sell besides cell phones and way overpriced cell phone accessories.
I'm lucky that I live near both a Frys and a MicroCenter and can say that each of them sell more things of interest to the electronic / maker (whatever that is) hobbiest / DIY market then the Radio Shacks in the area.
-Phil
I wish that RS could be relevant to me but around here they're worthless. They do have some very overpriced resisters and things but their selection is rather pathetic. If I needed a specific discreet component I would go to Frys and I think I would have a better chance of getting it there! What I have been doing is ordering from Newark/Element14. They sell carbon resisters for a penny each if you order in quantities of 100! That's a dollar for 100 of a given value. For only $20 - $25 you can build a nice collection of resisters that will mean few to no desperation runs to RS for their 5 packs of resisters. You can get very reasonable prices for capacitors and transistors. Stock up over a few months and save a LOT of money in the long (and short) run!!
Jim
Michael's gets by quite well with a little over 1,000 stores. While they don't have quite the geographical coverage of Radio Shack, the fewer stores allows each one to have deeper inventory. I live near no fewer than three RS stores within a 15 minute drive, but it's a crapshoot that any single store will have everything I need for a project. It's far better to consolidate retail fronts and inventory, so stores gotta go. What level that is remains to be seen. Their initial 1,200 store plan is, IMO, a good start, but it shouldn't end there.
I am hopeful in their attempted turnaround they move away from their harmful pricing structures. Charging 300-800+ percent for commodities like special batteries and cables isn't winning them any loyal customers. They may make the occasional $20 sale for a battery that costs them $2, but that customer will not come back. That's not the path to successful retailing. My hope was that because Magnacca came from a drugstore discounting chain, he'd instill some of the logic behind low-price leadership to bring in the customers and renew the base, but except for very narrow niches that doesn't seem to be the case.
I lived (briefly) in the Seattle area in the late 70s, and worked for Radio Shack. I recall the store in Burien had the best sales of the whole district, not just because of the location serving the Yuppies, but also the store enjoyed a killer salesman. He later moved to my store and was the manager there for the remainder of my time in the area. He taught me a ton about selling. (The guy was a hoot, too. He smoked a pipe, wore old sweaters, and loved to talk about CBs to anyone who would listen.)
I don't recall if there was yet a store in Federal Way. My store in West Seattle was tiny, and got a trickle of business. I don't know how a store like this will fare if they start closing. On one hand, it served all the ferries that came into West Seattle, so where are those customers going to go? On the other hand ... well, maybe there is no other hand.
-Phil
It could have also been that the Battery Club was replaced by the realities of Costco and similar heavy discounters. A package of AA, alkaline no less, is not all that expensive. Eventually, a free cheapo flashlight battery is just a free cheapo flashlight battery.
-Phil
Besides the free batteries, anyone remember the free gray & red flashlights that took FIVE D cells? Those heavy things could double as a police baton.
http://www.ebay.com/itm/Vintage-RADIO-SHACK-5-D-Cell-Flashlight-Cat-No-68-1022-/390927709147
Oh, and what's this about the Seattle city council fining people with more than 10% food waste in their garbage? And I just heard yesterday the same city council voted unanimously to ban Columbus Day. Instead they will celebrate indigenous people day. I don't think that mentality is inline with the national gestalt.
Oh...THAT'S what that thing is. I thought they were shelf spacers. :
But it is inline with reality. Columbus did NOT "discover" North America, the Vikings were first. But his "discovery" ultimately lead to the annihilation of most of the indigenous cultures in North America by those that followed.
Err, well, presumably those indigenous peoples discovered the place first.
Wow, where do I start? I'm a proud Texan by choice. Born and raised in
Wisconsin, worked and met my wife in Kansas. When she wanted to buy a house and start a family; I wanted to establish roots in the sunbelt. It boiled down to AZ and TX; both conservative and sunny.
No offense taken, I'm well-read on current national and world events. Had I been looking for a left-leaning environment, CA would have been great; especially San Fran. etc. WA state has a lot going for it, I'm into being outdoors and cycling. Great place for that; at least the government support of bike-lanes and such. I knew a few people who left TX for WA state for those things.
As far as being insular, I don't get it. We do have internet here! FIOS here.
That's a huge part of what makes the USA great; you can live in a state that aligns with your personal view of how things ought to be.
Back ON TOPIC: Radio Shack is in a very compromised situation caused by years and years of a meandering business model. I thought that the years of pushing cell-phones in a saturated maked to be, uh, not a great idea. The probel, as I see it is that their traditional market being hobbyists and consumers needing electronic "glue" items like speaker wire, may well not have had the profitability to sustain a reasonable number of stores for the population, much less too many stores for a given area. I have one 1 mile away and another 2 miles away.
Fry's is about 10, 20 and 40 miles away. I'll drive that to get some components and much more to boot.
Mod(s): If I was too political, no problem I can edit if you don't beat me to it.
Rick In Texas (YEAH!)
That would be about $3-12 of gas for me. I'm not an oil baron, so I'll pass and just order from Mouser and let the USPS deliver.
Plenty of impulse buying happens too. When you're paying $6.95 to ship 10 items, it's hard not to add a bunch more stuff just to make it worthwhile. I almost always pad the order up to where the shipping is only about 10% of the total. I never have trouble finding more to buy