Why does RadioShack still exist?
The chain says that sales are falling and that profit this year will be lower than in 2011.
RadioShack suffers from the same problem as Best Buy (BBY). The stores have essentially become showrooms for people who want to check out the products -- and then buy them from Amazon (AMZN) and other online retailers.
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RadioShack's sales and earnings came in below analyst expectations, which triggered the sell-off on Wall Street. The company reported $1.01 billion in revenue, lower than the $1.06 estimated by analysts. The company lost $8 million, or 8 cents a share, way down from the $35.1 million profit it made a year earlier. Analysts were expecting a profit of 4 cents a share.
Sales at stores open for at least a year fell 4.2%.
There's another problem for RadioShack. People aren't buying as many computers and cameras, which bring higher margins, The Associated Press reported. Instead, they're buying more tablets and smartphones, which don't contribute as much to the bottom line.
It all adds up to a bleak picture for RadioShack. That the company has actually been able to make it to this point is shocking. I can't see many bright spots in this chain's future.
The few times I've been into RadioShack lately, I've noticed some interesting things. First, the store is usually empty. Second, the salespeople are a little too attentive, descending on me the minute I walk in. Third, a huge chunk of each store is devoted to mobile phones, leaving little space for much else. But the stores generally seem to be in strip malls and other low-rent areas, which help keep the company's costs down.
Can this chain continue to exist?
Moody's reduced its ratings on RadioShack to junk status after the report. The company said 2012 will be "another challenging transition year" and said its annual profit would be less than the $72.2 million it reported last year.
Analysts don't expect the stock to go very far.
"This is not a good quarter, and (it) highlights the increasingly difficult competitive position that RadioShack is in today," David Strasser of Janney Capital Markets wrote to clients, according to AP.
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I worked as a Radio Shack manager for 15 years. They (the corporate higher-ups) have lost sight of what customer's really want. After Len Roberts left as CEO, the company began a long down-hill slide, punctuated by some real internal problems. Radio Shack was once and industry leader that set trends, rather than the let's do it like everybody else. They have really lost the idea of who they really are. Changing their name to just "The Shack" was a bonehead idea. Making employees dress in t-shirts and wearing lanyard name tags is what everyone else in the industry does. Being different set us apart. I continue to be amused at the problems corporate sends down into the field and at store level. Managers don't run their stores, they merely have to report numbers and key merchandise sales to their district managers two and three times a day. Instead of sales and focusing on customer's needs it's charts and numbers to be reported to the district manager, regional manager and divisional V.P. Top heavy in middle managers and lots of number reporting. Move over Circut City, here comes The Shack. Can you say crash and burn?
Perhaps RS could re-invent itself into a modern DIY kit building store with higher end passive components (resistors, capacitors, diodes) not the current floor sweepings from China. If they would stock Japanese made items from Panasonic and other quality parts they would survive and become more important in the marketplace.
Where else are you going to get that 1 micro farad capacitor at 8:00 pm.
If I want a cell phone, I'll go to Verizon or AT&T. Radio Shack isn't in the top five destinations if I'm looking for a phone, computer, stereo, etc. I can get the same quality stuff at Walmart. So if they don't stock electronic components, I have no need for them.
They did it to themselves.
You know, there was a time in America when people liked to fix stuff, build stuff, invent stuff... radioshack was a great source for small electronic parts.
Seems folks today don't care or don't think the skills are worth acquiring anymore. Sad, very sad.
I went into the local radio shack for some radio gear. I waited 15 minutes while every employee was writing phone contracts, or dealing with phone issues. When someone finally waited on me, they told me they don't carry ham radios any more. While waiting, I looked at their electronic stock. WAY overpriced.
The local store is 50-60% centered on phones. I can get them at walmart.
The chain has lost it's focus. It should be called "cell phone shack".
Radioshack is one of the only places to buy electrical components. When I needed some resistors thats where I went. Sure they are cheaper online, but if you don't have the time to wait for shipment there is nowhere else you can get things like that.
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