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RadioShack To Close 500 Stores, America Surprised To Learn RadioShack Still Exists

Radio Shack

RadioShack (apparently the company eliminated the space years ago), a name that seems more closely associated with an era when Americans bought Citizen’s Band radios, Walkie Talkies, and “boom boxes,” announced yesterday that it was closing 500 stores, but the company seems surprisingly strong given the fact that it has a reputation of being so far behind the times:

On Sunday, RadioShack Corp. used comedy, in the form of a Super Bowl ad, to show its stores being dismantled and rebuilt. On Tuesday, the news broke that some of the stores will be dismantled, period.

According to people familiar with the matter, RadioShack is planning to close around 500 locations in the coming months. It isn’t clear which of RadioShack’s roughly 4,300 stores will be closed and when exactly the closings will begin. The people familiar with the matter noted that it isn’t unusual for companies to close stores when going through a restructuring.

The news was a cold dose of reality after the upbeat feeling generated by the commercial, which was widely considered one of the best that aired during the big game Sunday night. In the commercial, RadioShack poked fun at its outdated image by bringing in a crowd of throwback characters from the 1980s, including Hulk Hogan, Erik Estrada and Alf, who purport to want their store back and proceed to tear out the shelves and haul away products.

On Tuesday, RadioShack shares slipped 4.8% to $2.36. Following the Super Bowl ad, the stock jumped more than 7% Monday morning.

The Fort Worth, Texas, retail chain has been working on transforming its image from an old-school electronics store into a destination for shoppers looking for entertainment gadgets, like headphones and smartphone cases. In October, RadioShack secured $835 million in loans to refinance about $625 million of debt. Those funds, from a group led by GE Capital, also freed up cash for RadioShack’s overhaul.

The retailer has struggled to reverse a string of losses deepened by a sales strategy focused around smartphones, which failed to improve revenue over the past two years.

The reaction I saw on Twitter to this news this morning was, in many cases, bemusement at the fact that Radio Shack (which is what most of us remember it being called when we grew up, and what I’ll refer to it as for the balance of this post_) still existed, or at least that it still had more than 4,000 locations around the country. One important thing to note about that number, though, is that, as with many of the Hallmark stores that you see around, Radio Shack also relies on a network of franchise owners that operate under the Radio Shack name. In addition to the 4,300 stores noted in the linked article, there are apparently more than 1,000 franchisee-owned locations. Additionally, the Wikipedia page for Radio Shack notes that it has over 7,000 locations, although this number may be out of date and may also include international locations. This reliance on franchisees seems to give the company greater flexibility, although it hasn’t prevented the financial troubles of recent years, including rumors last year that the company may file for Chapter 11 Bankruptcy, although that possibility now seems to have been averted as the company pursues the restructuring that its Super Bowl ad seems to be presaging.

That said, one does wonder how Radio Shack has survived all these years.

Quite honestly, I cannot remember the last time that I was in a Radio Shack, or why I may have gone in there. When I was a kid I remember the Radio Shack at the local mall was one of those places I liked to hang out and just look at some of the cool technology that they had on display, especially when Radio Shack teamed up with Tandy and began selling computers, including the TRS-80, which quickly seemed to become a ubiquitous addition to the still-new computer classes that were just starting in many American High Schools. Remember, this was in an era where computers were just starting to become a consumer item. The Apple II had just come out a few years earlier, but was mostly only available via mail order (there were no Apple stores back then kids, sorry) and Commodore had just started to break onto the scene, first with the Vic-20 and then the Commodore 64, in a way that made computers somewhat affordable for middle-class American families. Being able to play with the computers set up at the local Radio Shack was a rare treat back then. Other than batteries and I think the rather cheap walkie talkies I got for Christmas one year, I can’t remember much of anything that my parents bought at Radio Shack back in those days.

Over the years, it seems, the company has changed its focus into higher technology. Thanks to partnerships with several carriers, they’ve apparently made a niche for themselves in the cell phone/smartphone market, for example. Additionally, if the company website is any indication, they also sell multiple brands of desktop, laptop, and tablet computers, although the fact that most store locations are in relatively small locations it seems likely that there is more choice on the website than at the bricks and mortar location. Obviously, this change has worked for them over the years otherwise they would have gone the way of record stores like Tower Records and Sam Goody. In some respects, then, it’s kind of cool to see a store that seemed to be stuck in the 70s and 80s is still around and may yet survive.

For those who missed it, here’s the Radio Shack Super Bowl ad, which should amuse anyone who grew up in the 80s:

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. Ben says:

    As someone who tinkers with electronics, I still go to RadioShack all the time, to get components that I don’t feel like waiting for an online order to deliver.

    And I also had to go there a couple months ago to get coax connectors to wire up my new digital antenna when I cancelled cable.

    I still find it useful to have around, but I’ll be much less interested in it if they ditch all of the hobbiest and DIY parts in favor of just going the cellphone/tablet/laptop route.

    Like or Dislike: Thumb up 14 Thumb down 1

  2. @Ben:

    Yea I kind of forgot about that side of their business. I’m not sure how many electronics hobbyists there are out there, but I’m guessing RS kind of has that market cornered given that you don’t see many privately run electronics parts stores any more.

    Like or Dislike: Thumb up 1 Thumb down 0

  3. john personna says:

    it’s interesting, because Radio Shack’s ancient territory, DIY electronics has had a huge boom in recent years. Two million Raspberry PIs have been sold, and at least a few hundred thousand Arduinos. All those are for home electronics students/hobbyists. Maker magazines and fairs continue. I hear that the White House will host one in 2014.

    Of course, as good as that business is, even for Radio Shack (their Electronic Learning Lab is foundational), it can’t really justify premium mall space. A strip mall shop and even more a web store satisfies hobbyists.

    No, I can see the reason for the Makeover. The Apple Store is now the model. RS may never be quite that cool, but I can see them being a down-market simulacrum. If you want to sell a bunch of $200 headphones, don’t put them next to $20 RC helicopters.

    Like or Dislike: Thumb up 2 Thumb down 1

  4. john personna says:

    @Ben:

    Me too, but when we buy $5 of parts we aren’t really helping to pay the rent.

    Like or Dislike: Thumb up 2 Thumb down 0

  5. C. Clavin says:

    11% of their outlets? Meh.
    I hope they keep the one near me open…I go in there 4-5 times a year for whatever.
    There always seems to be someone else in there too…which is a good sign.

    Like or Dislike: Thumb up 2 Thumb down 0

  6. Neil Hudelson says:

    RadioShack is a hidden gem on Black Friday. They have some really good deals on computers and higher end electronics, but no lines since no one really thinks of them for their Christmas shopping.

    I usually arrive there about 8 am, find all their advertised deals still in stock, and save about $800 in electronics.

    Of course I doubt they turn a profit on those deals, and that’s usually the last time I step into the store until the next Thanksgiving, so…

    Like or Dislike: Thumb up 3 Thumb down 1

  7. Peterh says:

    The local RS store, amazingly, is the only outlet I’ve found that carries batteries for my Bushnell golf rangefinder…..not even the local Rodger Dunn carries them…..not cheap either….$20 for a package of 2…..

    Like or Dislike: Thumb up 0 Thumb down 1

  8. Mikey says:

    @Ben: They’re also a good source for the kinds of cables and connectors those of us who work in telecom need sometimes. Close to home and, as you point out, no waiting for delivery.

    Like or Dislike: Thumb up 3 Thumb down 0

  9. john personna says:

    @Neil Hudelson:

    Heh Black Friday, reminds me of the time I went in and bought my $1 stack of blank CDs, and my $1 stack of blank DVDs, and left.

    Great for me, but not a tremendous business move.

    Like or Dislike: Thumb up 1 Thumb down 0

  10. Tyrell says:

    Radio Shack is one of the few places that still sell sw radios (short wave), cb radios, scanners, marine radios, amateur station radios, two way radios, lots of electronic parts, and science kits. If more people knew this, they would get a lot more business and new customers.

    Like or Dislike: Thumb up 3 Thumb down 0

  11. john personna says:

    @Peterh:

    Out of curiosity, try it on eBay, “buy it now.” What’s the price?

    If I can get you 10 for $21.49, free shipping, that too might explain the change in RS strategy.

    Like or Dislike: Thumb up 0 Thumb down 1

  12. Ron Beasley says:

    Herathkit and now Radio Shack, the two institutions that were probably responsible for me becoming an electrical engineer. It is sad indeed.

    Like or Dislike: Thumb up 5 Thumb down 0

  13. john personna says:

    @Ron Beasley:

    I was just checking their homepage. They front themselves as a cellphone company, sure, but their hobby and do-it-yourself tab is only 3rd over, and very good.

    They’ll sell you a 3d printer!

    Like or Dislike: Thumb up 0 Thumb down 0

  14. Matt says:

    @Ben: Same as there’s basically no where else to find components for circuit construction or repairs.

    Like or Dislike: Thumb up 2 Thumb down 0

  15. john personna says:

    @Ron Beasley:

    Besides which, any similar kid today would have Evil Mad Scientists bookmarked. Sparkfun as well.

    Like or Dislike: Thumb up 0 Thumb down 1

  16. rudderpedals says:

    @Ron Beasley: Same here. The schlock shack introduced me to CB but the ham bug soon bit. A career in RF and firmware followed. I will miss the old Radio Shack.

    Like or Dislike: Thumb up 0 Thumb down 1

  17. john personna says:

    @rudderpedals:

    If you actually miss the old Radio Shack, go to a Maker Faire.

    Like or Dislike: Thumb up 1 Thumb down 0

  18. Pinky says:

    The problem with RadioShack isn’t their product line, it’s that their locations are mostly in malls. Malls are dying. Non-hobbyists go to mall RS’s to get batteries for things they bought at another store, maybe. Hobbyists will travel a good distance to get the specific items they’re looking for, so you don’t need a location in a mall. As for the other portion of their business, the pricier electronics, the WSJ article indicates that they’ve been a bust. So, good for them if they can turn it around, but they may be better off becoming a smaller chain of niche stores.

    Like or Dislike: Thumb up 2 Thumb down 0

  19. John Burgess says:

    While I’m not a regular RS customer, I’m a frequent one. Cables and bits and pieces that I can’t find readily elsewhere (other than online which involves a wait for packing and shipping). I’ve a few within a 10-mile radius of me.

    Yes, they’re in strip malls, but then, most malls in FL are strip malls

    Like or Dislike: Thumb up 1 Thumb down 0

  20. argon says:

    @john personna:
    Yep, Maker Faire or a hamfest, or someplace online like Adafruit and Sparkfun. There are a lot of good SW and ham radio kits being offered by QRP organizations, Elecraft and TenTec.

    Like or Dislike: Thumb up 1 Thumb down 0

  21. Pinky says:

    @John Burgess: Most buildings in FL are strip malls.

    You’re right, though. I think they’ve consciously moved away from indoor malls.

    Like or Dislike: Thumb up 2 Thumb down 0

  22. john personna says:

    @argon:

    I used to support Adafruit, until I learned that they hellban any customer who is not sufficiently effusive.

    Like or Dislike: Thumb up 1 Thumb down 0

  23. al-Ameda says:

    We have a Radio Shack in my small town, and every time I need some miscellaneous generic gear – cables, connectors, etc. – at a good price I go there, and the young people who staff it always provide good assistance.

    I hope our store stays open – it is in a relatively cheap strip mall location.

    Like or Dislike: Thumb up 2 Thumb down 1

  24. Boyd says:

    For the record, Radio Shack didn’t “team up with Tandy” to market the TRS-80. Tandy already owned Radio Shack, having bought the company in the early ’60s.

    Like or Dislike: Thumb up 7 Thumb down 0

  25. grumpy realist says:

    Only place I know to get a) cheap voltmeters b) small travel alarm clocks.

    Like or Dislike: Thumb up 2 Thumb down 0

  26. john personna says:

    Home Depot probably has much of the stuff we old timers go to RS for. A huge coax collection, etc.

    Like or Dislike: Thumb up 0 Thumb down 1

  27. rudderpedals says:

    @john personna: I read your comment as “take time off from work to see new stuff, hang out with fellow geeks and argue-drink-share-learn new things-capture a spark of a solution.” Yes, and yes.

    Like or Dislike: Thumb up 1 Thumb down 0

  28. john personna says:

    @rudderpedals:

    Especially if you can take a kid along!

    Like or Dislike: Thumb up 2 Thumb down 0

  29. Tony W says:

    My old Robie the Robot still works! That said, I remain convinced RS is a front for organized crime – there is no other way they are still in business.

    Like or Dislike: Thumb up 2 Thumb down 0

  30. Tyrell says:

    @rudderpedals: The Shack is still like a candy store for a lot of people. We go in there just to see all the neat gadgets – that you won’t see anywhere else. Where else can I find a backlight bulb for an old radio or a cb mike? The small shopping centers will be their best bet to attract business. A lot of RS customers are looking for a specific item and don’t want to spend the longer time required at a mall.

    Like or Dislike: Thumb up 2 Thumb down 0

  31. Rufus Leeking says:

    @Ben: Hold on a second, this article is incorrect. RadioShack didn’t announce that it was closing stores, the Wall Street Journal did, citing unnamed sources.

    Like or Dislike: Thumb up 1 Thumb down 1

  32. rudderpedals says:

    @Rufus Leeking: Great point. Hell it’s an invitation to compare and contrast the utility of RS as compared to the WSJ. In the left corner: RS, multidecades of stocking incredibly useful but obscure components in far flung places around the country and inciting imagination. In the other corner: WSJ with its loopy op-ed pages and unreliable reportage under new ownership.

    Like or Dislike: Thumb up 2 Thumb down 1

  33. rudderpedals says:

    @Tyrell: If you’re regularly buying backlight bulbs or old mics your junkbox is no where near adequate.
    You really belong at a hamfest where you can get the stuff for a song.

    These days the kool kidz are ditching the incandescent backlights, the rice bulbs, with a couple or three clear LEDs and a current limiting resistor.

    I have a couple of handheld mics. They’re all 600ohm. Looking to trade for a bug or a sturdy straight key….

    Feed your junkbox. Heaven help our spouses.

    Like or Dislike: Thumb up 1 Thumb down 1

  34. I blogged about this on my TRS-80.

    Like or Dislike: Thumb up 3 Thumb down 0

  35. john personna says:

    @James in Silverdale, WA:

    A TRS-80 (used) was actually my first computer. It wasn’t a great computer, but it was cheap.

    I mean, talk about bad, I never got the tape drive to save my programs more than about 30% of the time. I finally just programmed things as one-offs, to be discarded when I powered down.

    Like or Dislike: Thumb up 2 Thumb down 0

  36. roger says:

    Affectionately remember working on a TRS-80 with the huge floppy drive. Love the nickname for that computer: “Trash 80.”

    I built a radio and and learned theories about electronics on kits given to me by my father for Christmas and birthdays.

    I certainly hope Radio Shack can find a way to stick around. They need to get more into online ordering and out of the malls.

    Like or Dislike: Thumb up 1 Thumb down 1

  37. rudderpedals says:

    @john personna: The demodulator was finicky and I’ll wager dealing with a crummy cassette drive if it’s anything like the i/o from a TDL brand “SMB” multipurpose the drives were destined to fail. We tried a bunch of different audio drives, all of them performed about as poorly as yours with 70% failure rates – except for one.

    We ruled out the typical culprits (power supply, ground loops, 567 demod tuning) and found all of the off the shelf drives were just ot up to snuff with dirty improperly balanced audio. The only drive that consistently worked was the Superscope 105 loaded with nothing larger than a C-60. It was about $125 at the time.

    There’s an image of the drive up top at this link. The thing was built like a brick house. Check it out and see if it brings back memories for you too. http://www.rainerlinz.net/NMA/articles/Ferric-oxide.html

    Like or Dislike: Thumb up 0 Thumb down 1

  38. john personna says:

    @rudderpedals:

    Yeah, I don’t even know what cassette recorder I used …

    In a related vein, on how far we’ve come, Using Raspberry Pi as a Lamp Timer. I mean using a computer God couldn’t buy in 1978 … for a lamp timer.

    Like or Dislike: Thumb up 1 Thumb down 0

  39. rudderpedals says:

    @john personna: Hey that’s a a neat start. If this were the real world product devel someone would be coaching the designer to replacing the pi with something more cost effective like one of the 89 cent Phillips microcontrollers but it’s not a product yet and I’ll be damned if I wouldn’t like one of those things right now to hook up to a caller ID box and signal callers with flashes of morse code. Not much of a market there I suppose..

    Like or Dislike: Thumb up 1 Thumb down 0

  40. Roger That says:

    This sucks. I had 3 punches left on my Battery Club Card.

    Like or Dislike: Thumb up 3 Thumb down 0

  41. jd says:

    @Ron Beasley: Same here. As a kid, my dad would take me to a Radio Shack the next town over. I’d drool over all the open cardboard boxes of resistors, capacitors, etc. I felt a chill in my soul the first time they started to blister-wrap stuff.

    Like or Dislike: Thumb up 1 Thumb down 0

  42. rudderpedals says:

    Survey: Do you now or have you ever owned:
    a micronta vom or dvm
    new and unused DIP sockets still in the blister pack (probably wirewrap)
    a radio shack weather or aircraft receiver or scanner
    antenna mounting brackets – U bolts and fragile looking eave brackets
    341 and 555 you never got around to using, still in blister pack
    solder wick
    small spool of RS solder to back up the better multicore stuff
    The fine RS soldering gun, and the not so fine but cheap 30 watt unregulated iron

    Like or Dislike: Thumb up 1 Thumb down 0

  43. Pinky says:

    There’s something wrong with their business model if they can fill a thread with affectionate comments but they’re still losing money.

    Like or Dislike: Thumb up 1 Thumb down 1

  44. john personna says:

    @rudderpedals:

    I own a Hakko 936 that I really do not deserve.

    Like or Dislike: Thumb up 0 Thumb down 0

  45. jd says:

    @rudderpedals: God help me, I have all of them.

    Like or Dislike: Thumb up 1 Thumb down 0

  46. rudderpedals says:

    @john personna: You and your solder pads deserve it. That’s a bit fancier than the ugly green Weller machine.

    Like or Dislike: Thumb up 0 Thumb down 0

  47. rudderpedals says:

    @jd: Gotcha! So far only personna, me and you fessed up. Nevertheless, I think I can safely pencil Schuler, Tyrell, Boyd, James in the evergreen state and roger in here too. Someone with resources and a good idea could staff a virtual development effort with OTB commenters.

    Like or Dislike: Thumb up 0 Thumb down 0

  48. Boyd says:

    @rudderpedals: Yes, include me in that group. As an Amateur Radio licensee, many times the only place to find needed components back in the day was at the local Radio Shack (and not the one in the mall; that one doesn’t carry the geeky stuff). Also, tools (I’m thinking soldering equipment and supplies) that ya just gotta have right now.

    And I lost count of how many CB radios and accessories I bought from Radio Shack before I became a Ham.

    Like or Dislike: Thumb up 1 Thumb down 0

  49. Boyd says:

    Oh, and my favorite phrase to annoy my son back when he managed a Radio Shack store:

    You’ve got questions, we’ve got blank stares.

    Like or Dislike: Thumb up 2 Thumb down 0