When it comes to retailing, “quaint” don’t cut it, and doesn’t RadioShack know it? It seems no matter what it does to stand out in a big box store world, this small box store’s world just keeps getting smaller and smaller.
Only this week, RadioShack’s chief financial officer resigned, after arriving back in February from Dollar General with great fanfare and anticipation. Officially, John Feray says he left for personal reasons.
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But the challenges facing returning executive Holly Etlin, who previously served as RadioShack’s interim CFO, are much more than personal. That’s because the iconic American brand is teetering on the brink of bankruptcy, and nothing it is doing seems to be working.
Give credit to RadioShack’s revolving door of managers for trying, but no strategy has produced sales that stick, and customers who stick around. The irony is that the electronic chain’s staff get high marks for customer service and plain old smarts about all things technical. Tell me you never once stumbled into a RadioShack with some sort of electronic box and desperately asked the staff person there, “What wire connects into this?”
Invariably, the worker found it, but apparently not enough customers were in need of it, or him, or the store for that matter. Because the fact of the matter is this little American treasure is getting lost in the big retailing world where personal just don’t cut it.
The harsh reality is that RadioShack is a victim of the very cutting edge technology it once led, and even its tiniest stores once offered. It’s not that the battered brand has succumbed to much larger competitors as it has the merciless forces of the world wide web it ironically and presciently saw coming. Recall that it was RadioShack, soon after going public back in 1935, that darn near single-handedly led the home-electronics revolution.
“When record players were phonographs and stereos were hi-fis, this is where people bought them,” writes the Washington Post’s Justin Moyer.
Yet even for this chain that early-on and before many, appreciated the dimensions and possibilities of this thing they would later call the Internet, RadioShack failed to capitalize on its prescience.
Equally ironically, that very online world RadioShack saw coming would later prove its undoing. These days even the most technically challenged can search online for the wires or specialty items they had up to now, found only at that ubiquitous and omnipresent store.
That doesn’t mean RadioShack hasn’t tried to keep those customers. The problem was store-within-a-store smartphone centers or unique tablet offerings could keep those customers. Indeed, those very businesses have become as commoditized as “The Shack” itself has become cliché.
Retail experts tell me the problem might be branding. Although most Americans know the name RadioShack, they have a tough time describing what “is” RadioShack. For some, it’s unusual and hard-to-find electronic items and homemade guitar amplifiers; for others, maybe ham radios and remote-control cars for kids.
But ironically, nowhere in that consensus confusion is a critical word about the folks who work in its stores. Yet sadly, it’s those 27,500 employees who are most vulnerable to what could be the most stark announcement yet – RadioShack shutting down.
The Wall Street Journal reports RadioShack is doing everything it can to avoid bankruptcy, but it’s running out of options almost as quickly as it’s running out of cash. Reports are the chain’s cash stockpile is down to little more than $30 million and the company is frantically trying to secure a $585 million financing package, led by UBS and the hedge fund Standard General LP.
Whether either or both financial giants can return RadioShack to anywhere near its giant stock price of close to $77 about 15 years ago versus the pennies it trades for today is anyone’s guess. But there’s no guessing that the Shack’s time is running out. Even RadioShack is acknowledging as much when it outlined in a report filed with the Securities and Exchange Commission, that “we may not have enough cash and working capital to fund our operations beyond the very near term, which raises substantial doubt about our ability to continue as a going concern.”
Its stock already risks being delisted on the New York Stock Exchange – lost in a world of far hotter electronic and technology names on which, at least in the retail world, RadioShack used to be on a par.
It’s hard to say what happened – whether it was just the Radio in its name, or the fact that its own high-tech offerings in time seemed so pale. The sad fact is that big box retailers eventually out-priced them, and niche players that appealed to more upscale “niche” tech interests, out-muscled them.
Eventually RadioShack ceased being cool – practical, yes – cool, no. And no matter its expertise or much praised customer service, the customers this iconic brand was serving, was steadily shrinking.
It’s a reminder to those who need it that answering your customers questions is one thing, but giving them a convincing reason to come into your store in the first place – well, that’s quite another thing.