Can Dr. Dre save RadioShack?
The dying chain is betting that the $400 headphones from the famed rapper can turn it around. That's a tall order.
It's been a tough year for RadioShack (RSH). Its stock has plunged 39% since last May, and an unexpected loss last fall led to a management overhaul.
Once the place to go for blank cassette tapes, electronics components and unusual batteries, the chain has sunk into an apparent abyss of irrelevancy. Even worse, it has continued to lose money, prompting shareholders to flee.
Now, the company's new management has a plan to revive the brand by joining forces with one of the most popular electronics accessories, Beats by Dr. Dre.
A line of headphones, speakers and other devices, Beats products aren't cheap. Its pro headphones, which its site says are used to mix in "every major studio," cost $400, while its earphones can cost between $100 to $150.
The question isn't whether the new line is attractive to young consumers, however. The real issue facing RadioShack is whether teens and 20-somethings will even think to make their way to the fading retailer to pick up one of the sleek headsets.
After all, RadioShack is better known for helping aging electronics aficionados than for assisting young music fans. And there's no lack of rivals selling Beats products. The brand is also available from its own website, as well as from RadioShack rivals such as Amazon.com (AMZN) and Best Buy (BBY).
RadioShack is certain the deal will help with its "brand transformation," the company's chief marketing officer told Marketing Daily. The effort is part of chief executive officer Joseph Magnacca's plan for reviving its image. Magnacca, who is credited with breathing life into Duane Reade drugstores, last month vowed to refresh some New York City locations, Reuters notes.
"We need to broaden our appeal to be inclusive of Millennials who currently don’t know that they can find the hottest music accessories that they want in their neighborhood," marketing chief Jennifer Warren told Marketing Daily.
The chain will get the word out by airing a spot featuring Robin Thicke's "Blurred Lines," with women dressed in bikinis and plastic wrap and adorned with RadioShack logos. The commercial will air on networks that attract younger viewers, such as MTV and Comedy Central.
Whether it's enough to lure young consumers to cross its threshold won't be known for another quarter or two. If the effort fails, maybe it's time for RadioShack to pull the plug and call it a day.
Follow Aimee Picchi on Twitter at @aimeepicchi.
Don't buy those "Beats" headphones...cheapest set I EVER had....actually broke after less than 2 weeks
Beats will just be a band aid fix. These headphones are made way to cheap from some of the lowest grade plastic and a pair of Bose quite comfort sound better and are made better. If you want to by a pair of $400 headphones the Bluetooth Parrot Ziks sound great, have noise cancelation, and are built solid.
Ha ha ha, The woman in the photo is looking at the phone poster in the Radio Shack window, the men are looking at HER! Men are sloppy, happy, slobbering dogs. I know because well... I am one. God bless the women who put up with us.
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A basic income policy can actually ensure a decent standard of living for everyone.
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